Pennsylvania SERS CIO to retire amid allegations

The pension fund’s CIO Anthony Clark will retire on 31 December.

Anthony Clark will retire from his position as chief investment officer at the Pennsylvania State Employees’ Retirement System on 31 December, according to documents from the pension’s Wednesday board meeting.

The announcement of Clark’s retirement follows informal allegations made against Clark, which were brought to the attention of the Pennsylvania SERS’ board before the Thanksgiving holiday, the documents said. The allegations involve “possible criminal and unethical conduct” by Clark, according to a letter Pennsylvania state treasurer Robert McCord sent to Nicholas Maiale, chairman of the Pennsylvania SERS board, on 4 December.

Neither Pennsylvania SERS nor Clark were available for comment at press time.

After Pennsylvania SERS became aware of the allegations, Clark “did not return to the office, no longer had access to computer files, and was approved for use of personal/annual leave while an investigation takes place”, according to a statement from the pension.

The pension’s Audit Committee plans to engage an independent third-party investigator to assess the allegations. “If there is merit to the allegation, we are eager to discover and address it,” the statement read.

Pennsylvania senator Chuck McIlhinney is responsible for leading the search to replace Clark, according to the pension documents.

“It’s too early to say when or how that process will unfold,” a Pennsylvania SERS spokesperson wrote in an email to Private Equity International.

McIlhinney’s Harrisburg, Pennsylvania office had not returned a call for comment at press time.

Clark joined the pension system in 2010 and was previously the deputy chief investment officer at the Pension Benefit Guaranty Corporation and director of global equities at Howard Hughes Medical Institute, according to his LinkedIn profile.

In the letter sent to Maiale, McCord expressed his concern that the board’s chief counsel “waited almost a month to alert the Board of the existence of these allegations” and in the meantime the board had proceeded to approve “investment actions that involve billions of dollars based upon recommendations from the very person who is the subject of these allegations”.

Documents from the pension’s board meeting Wednesday stated the system had considered delaying new investment business until it received more information about the allegations but later decided to proceed with the investments.

“It is important that we advance with the investment items on the agenda,” Maiale said in the documents. “The need to pay benefits hasn’t stopped, so it is important that we keep the portfolio working for the benefit of our members.”

The investments include a $100 million commitment to a custom co-investment fund with The Carlyle Group. This initial commitment is directed at Carlyle’s US, Europe and Asia-focused buyout funds, according to pension documents.

Pennsylvania also formed a new relationship with Zurich-based CapVis Equity Partners, committing $50 million to the firm’s fourth vehicle. CapVis launched Fund IV in February with a €600 million target and a €750 million hard-cap, PEI reported. In July the fund had reportedly been approaching a €300 million first close. CapVis invests in middle market companies across Europe’s German-speaking region. Fund IV has the same target has CapVis III, a 2008 vintage that received commitments from UK-based BP pension fund and the San Francisco Employees’ Retirement System, according to PEI’s Research and Analytics division.

Both buyout-focused investments are an effort to move the buyout segment of Pennsylvania’s investment portfolio closer to its 65 percent target allocation. The allocation was about 62 percent as of 30 June.