NY State Common to Emerging Managers: "We Have a Placement Agent Workaround"
I'm reporting from the Private Equity Analyst Outlook Conference at the Grand Hyatt in New York. Raudline Etienne, Chief Investment Officer for the New York State Common Retirement Fund, fielded some difficult questions about the fund's ban on placement agents. She explained how the NY State Common's emerging managers program will resolve the dichotomy of banning placement agents but remaining committed to new, smaller funds, which, she said, often perform the best. On emerging managers: "We looked at the ‘big boys' in our portfolio, and it's the early funds--funds one through three-that we made the most money on. So, in time we will identify the next generation of emerging managers to back." The moderator asked how the fund might reconcile that with its recent ban on placement agents, a result of the pay-for-play debacle that has played out since this summer. Young funds, with fewer resources to dedicate to fundraising, often need placement agents the most. Etienne said the firm has enacted an emerging manager program to avoid missing out on new, small funds that often need
