The man behind the controversy

Over the past 25 years, William Mabe led a successful, non-descript life as an Ohio insurance executive. Then he became CEO of the Ohio Bureau of Workers’ Compensation – and a lightning rod for controversy. By Paul Fruchbom.

To make a broad generalization, retired insurance executives are not known for their wild behavior – people who spend their careers studying actuarial tables are not the type to rock the boat. It is perhaps surprising then that the actions of one such executive, William Mabe, the chief executive officer of the Ohio Bureau of Workers’ Compensation, are sending shock waves throughout the private equity industry.

Mabe: ensuring trouble for GPs

Earlier this month, the Ohio BWC, a $14 billion (€11.7 billion) workers’ compensation fund, sent a letter to its private equity general partners stating that the agency, in response to a Freedom of Information Act request, would be publicly releasing information on its private equity programme, including valuations of portfolio companies. Though FOIA debates have been affecting the limited partner community for some time, this would represent the first time that an LP would publicly release such detailed information – and private equity pros are understandably upset about the impact this could have on their portfolio. The private equity players set to be affected, including firms such as The Carlyle Group, Castle Harlan and Harbourvest Partners, are reportedly preparing their legal response.

Though the action by the BWC is being called politically motivated by some – and even foolish by others – nothing in William Mabe’s past suggests a penchant for controversy. Previously, Mabe had spent approximately 25 years with Nationwide Insurance, most recently as senior vice president of Nationwide Provident Operation, one of the company’s divisions. He retired in 2003 and became a senior consultant for RE Nolan, as well as an adjunct professor at Franklin University.

Mabe’s ascension to the top of the BWC was quicker, but equally inauspicious – he found out about the opening through a newspaper ad and, according to an interview with the Dayton Daily News, thought the position “looked like a fun job.” He was chosen last month by Ohio governor Bob Taft, beating out three other finalists.

According to a statement at the time of Mabe’s appointment, Taft noted that Mabe had a “strong track record of improving private sector operations in need of turnaround,” a skill set that was needed to restore the reputation of the workers’ compensation agency. Earlier this year, Mabe’s predecessor, Jim Conrad, resigned following two scandals at the agency, including the loss of $215 million in hedge fund investments and a suspect $50 million investment in a rare coin fund run by a friend of the governor’s.

Mabe has certainly not wasted any time in making controversial decisions of his own. Though much of the BWC’s policies have been revamped in the wake of the scandals via the recommendations of a three-person review team, Mabe is also in the process of shifting most of the portfolio into fixed-income investments and firing 69 fund managers in order to reduce costs. The decision to release information on private equity portfolio companies appears to be the result of striving to be as open and transparent as possible – but the way in which the process has unfolded has damaged the agency’s reputation with the private equity community in much the same way that the BWC’s previous indiscretions damaged its reputation with the public.

In an interview earlier this month with the Toledo Blade, Mabe said, “I tell my people I use the F-word all the time: focus, focus, focus.” Although it is unclear if portfolio company information will eventually be released, either due to legal challenges or a change of heart, private equity GPs across the country may soon start using an f-word of a different kind.