Key Takeaways
- • Alden Global Capital moved nearly $250 million of newspaper employee pension savings into funds it controls, according to The Washington Post, and that move is now drawing federal scrutiny.
- • Alden, which controls more than 100 local newspapers, is simultaneously pursuing a takeover of Gannett, the owner of USA Today and other papers, a bid Gannett is opposing.
- • In April 2019, a spokesman for Alden confirmed the firm was under investigation by the U.S. Department of Labor, which is examining the pension-related transfers.
- • Critics cite the pension transfers and Alden's acquisition track record as central concerns in Gannett's opposition to the bid.
Summary
Alden Global Capital, a prominent hedge fund that controls more than 100 local newspapers, moved nearly $250 million of employee pension savings into its own accounts in recent years, according to The Washington Post. The unusual move has triggered federal scrutiny, and the Post reported that a spokesman for Alden confirmed in April 2019 that the firm was being investigated by the U.S. Department of Labor.
The disclosure comes as Alden seeks to acquire Gannett, the publisher of USA Today and other newspapers. Reporting cited in the coverage describes the pension money as having been shifted into Alden's Cayman-domiciled funds. Gannett has cited concerns over financing and pension funds in its opposition to the takeover by Alden's MNG vehicle.
Critics have pointed to Alden's track record of buying local newspapers and subsequently cutting costs and dismantling operations. Lawmakers, including Senator Chris Van Hollen and other Democrats, have publicly urged Alden to abandon its hostile bid for Gannett.
The case highlights the governance questions raised when a fund manager allocates pension capital of the employees whose newspapers it is acquiring into vehicles it controls, a practice that is drawing regulatory attention on both pension-protection and conflict-of-interest grounds.
The disclosure comes as Alden seeks to acquire Gannett, the publisher of USA Today and other newspapers. Reporting cited in the coverage describes the pension money as having been shifted into Alden's Cayman-domiciled funds. Gannett has cited concerns over financing and pension funds in its opposition to the takeover by Alden's MNG vehicle.
Critics have pointed to Alden's track record of buying local newspapers and subsequently cutting costs and dismantling operations. Lawmakers, including Senator Chris Van Hollen and other Democrats, have publicly urged Alden to abandon its hostile bid for Gannett.
The case highlights the governance questions raised when a fund manager allocates pension capital of the employees whose newspapers it is acquiring into vehicles it controls, a practice that is drawing regulatory attention on both pension-protection and conflict-of-interest grounds.
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