LANSING, Mich. (Michigan News Source) — Michigan’s Municipal Employees’ Retirement System (MERS) says it learned the hard way that “green” investments and foreign advisers can come with big risks: a newly unsealed lawsuit claims two Swiss managers steered MERS into $55 million in losses.
The pension fund alleges the advisers, tied to Switzerland-based Verdantf AG, steered MERS into risky “alternative-energy projects” while failing to disclose their own financial stakes, the Detroit Free Press reported. MERS says the pair never registered as investment advisers in the U.S., as required, and “doubled down” on troubled investments to protect their personal positions.
The losses come on top of a separate $100 million hit tied to a failed Hawaii coffee venture—a case in which MERS is now a defendant. The fund denies wrongdoing.
Verdantf’s attorney argues the accusations are false, saying MERS is simply trying to avoid paying more than $20 million in management fees. He maintains the firm earned substantial returns before being terminated in 2023.
MERS, steward of over $18 billion in taxpayer-backed retirement funds, argues the alternative-energy deals wiped out $52.7 million that can only be recovered through litigation.
Currently, a federal judge is weighing whether Verdantf’s request to keep portions sealed will stand.