New York State Common Retirement Fund related stories
All articles and analysis
Aldus Equity & Saul Meyer Charged in Kickback ScandalThe SEC has charged Aldus Equity and its founding principal Saul Meyer, as part of a pay-to-play scandal involving the New York State Common Retirement Fund. Meyer also has been named in a suit brought by New York Attorney General Andrew Cuomo, and has surrendered himself to authorities. From the SEC complaint: "Meyer caused Aldus to pay sham fees to Morris in order to obtain a Common Fund investment even though Aldus was already serving as a private equity consultant to the Common Fund and was already negotiating with the Common Fund's investment staff about the proposed investment before Meyer had ever met Morris." Aldus has replied by calling the charges "appalling and careless," adding that the SEC wants a "trial by news release." (here is its full statement /wp-content/uploads//aldus20statement.pdf ) Here is a copy of the SEC complaint: Sec Complaint http://www.scribd.com/doc/14799747/Sec-Complaint Publish at Scribd http://www.scribd.com/upload or explore http://www.scribd.com/browse others:
- Quadrangle Wins LP Vote, Can Continue Investing
The Quadrangle Group will be allowed to invest the final $500 million of its $2 billion second fund, after a "significant majority" of limited partners voted to continue the commitment period, peHUB has learned from LP sources. A firm spokesman declined comment. For the uninitiated, Quadrangle's investors had until this past Friday to vote in favor of ending the fund's investment period, based on the February departure of "key man" Steve Rattner (who left to become Obama's auto czar). Such a move would have precluded Quadrangle from adding new portfolio companies, although it would have been allowed to re-invest in existing ones (including add-on transactions). LPs rarely invoke such privileges, due to concerns that ending an investment period could cause an exodus of firm personnel -- thus leaving existing investments unattended. But Quadrangle was a special case. Not only was Rattner the firm's public face, but he also was the primary contact with many of its larger limited partners. Moreover, Rattner has been implicated as at least a tangential part of the pay-to-play scandal /tag/new-york-scandal/ that has engulfed the New York State Common Retirement Fund -- although no formal charges have been brought against him.
- Random NY Kickback Scandal Ramblings
Here's a handful of additional notes on the NY State Common Retirement Fund situation and, in particular, yesterday's decision by Comptroller DiNapoli to ban the future use of placement agents by firms requesting NYSCRF investments (find my initial take here /37847/dear-comptroller-dinapoli-huh/ ): *** I want to stress that I am in no way attacking the integrity of the current NYSCRF private equity staff, whose morale right now must be lower than that of Montreal Canadiens fans (happy 100 years). In fact, I have to wonder if the lid would have been blown off this scandal earlier, if New York had some sort of whistleblower shield to protect them from ratting out their bosses. Kind of reminds me of the Ohio BWC situation, where good staffers got caught up in something not of their own doing. *** The ban extends beyond placement agents, but a NYSCRF spokesman says that it will not extend to things such as the use of a third-party data room or printing company. I'm supposed to be emailed the official guidelines later today, and will post them. From what I can tell, they are not yet on the NYSCRF website. *** If you are a PE firm that used a placement agent, but are already in the midst of being diligenced by NYSCF, you're okay (seems the ban comes with a grandfather clause). *** DiNapoli has hired outside consultants to review current policies and relationships, but the placement agent ban is not up for discussion.
- Dear Comptroller DiNapoli: Thanks for Trying, But...
New York State Comptroller Thomas DiNapoli http://www.osc.state.ny.us/ today "announced he has banned the involvement of placement agents, paid intermediaries and registered lobbyists in investments with the New York State Common Retirement Fund (CRF)." It's great that he's finally trying to do something, but this seems over-the-top reactionary. No one has beaten the drums harder on this kickback situation than me, but I can't see how the solution is to place an umbrella ban on placement agents. The vast majority of them -- at least the larger ones -- are reputable organizations that allow investment firms to spend their time investing (instead of fund-raising). So long as the chain-of-fundraising is disclosed -- as I suggested yesterday /37708/time-for-public-pensions-to-track-commitments/ -- then there is no harm in having a third party represent a PE fund's interests. After all, doesn't New York Common Retirement Fund use a third party (Hamilton Lane) to do most of its due diligence? The problem in New York was corruption aided, abetted and allowed to flourish due to an embarrassing lack of oversight. The single fiduciary system also didn't help, and it boggles my mind that DiNapoli has yet to rectify that situation after two years on the job. After all, the only other state with a similar system is Connecticut, and that state's prison guards got to spend quality time with an ex-Treasurer and an ex-PE firm chief.
- If Rattner Is Dismissed As Car Czar... Will He Go Back To Quadrangle?
Update: The deadline for LPs to decide whether they will terminate their investment in Quadrangle due to Rattner's departure is one week from today, peHUB has learned. Plenty of people are wondering if Steve Rattner's involvement in the NY State Common kickback scandal will lose him his job as President Obama's top auto industry advisor. It seems obvious that he'd be shown the door, even if he told the U.S. Treasury http://www.bloomberg.com/apps/news?pid=20601087&sid=afB9Nsc3iSfY&refer=home about the investigation before Obama took office. It raises the question: Will he go back to Quadrangle? The firm recently put its fundraising on hold because of his departure. Meanwhile, he triggered a key man provision on older funds when he left (including Quadrangle Capital Partners II, the one under indictment). That key man provision requires a vote which had a deadline of April 24, a source said. LPs will be
- LPs want answers in wake of NY kickback scandal
Investors of Aldus have concerns, questions after alleged kickbacks