Gary Bland, chief investment officer of the New Mexico State Investment Council, tendered his resignation in a letter to New Mexico Governor Bill Richardson on Wednesday.
Bland, who took on the role in 2003, said he was “saddened and disappointed” over the resignation. He also touted the SIC investment programme, saying “through today, investment earnings of nearly $4.5 billion have been added to the Permanent Fund under the management of the State Investment Council (SIC) during the most difficult capital market environment in history.
“Through June 2009, the much criticised private equity portfolio had a 12 percent compound rate of return for five years”, he said in the letter.
New Mexico State Land Commissioner Pat Lyons, a member of the state investment council, meanwhile,
suggested Bland's resignation was under pressure related to the ongoing pay-to-play scandal. Lyons told the Associated Press that that a law firm hired by the pension had gathered information indicating that Bland “pressured investment firms doing business with the state to hire certain third-party marketing or placement agents”.
Lyons told the AP: “He was soliciting third-party marketers, and we didn't think it was the right thing to be doing.”
Lyons and other council members were prepared to try and oust Bland from his role before the resignation, according to the AP report. SIC hired the law firm to help the council comply with ongoing pay-to-play investigations by federal authorities in the state. New Mexico Attorney General Gary King also is investigating alleged pay-to-play corruption.
Bland's resignation comes several weeks after Saul Meyer, founder of private equity advisor Aldus Equity, pleaded guilty to securities fraud in a wide-ranging pay-to-play investigation involving New Mexico SIC and the New York Common public pension.
Meyer, who worked with New Mexico SIC recommending private equity investments as head of Aldus, is alleged to have “ensured that Aldus recommended proposed investments that were pushed on him by politically-connected individuals in New Mexico”.
Meyer made the recommendations despite “knowing that these politically-connected individuals or their associates stood to benefit financially or politically from the investments and that the investments were not necessarily in the best economic interest of New Mexico”, according to the complaint.
New Mexico SIC oversees more than $11 billion in assets and has a target allocation to private equity of 9 to 12 percent. The pension's actual allocation was 11.6 percent as of December, 2008. SIC suspended private equity investments after Meyer was indicted earlier this year. The pension has not yet resumed making investments in private equity funds.
Bland is only the most recent in a rash of high-level executives to leave their pension posts in the past few months.
Earlier this week, Eric Holomon resigned as chairman of the board of the Los Angeles City Employees' Retirement System (LACERS). Holomon resigned “as a cautionary measure” to make sure he was not in violation of a California law prohibiting pension fund members from selling investments to state pension plans, according to a spokesperson for LACERS.
Patricia Gerrick, the chief investment officer of the North Carolina Retirement System, was also recently fired by North Carolina Treasurer Janet Cowell in September for undisclosed reasons.