New York Still Shy About Private Equity

Jun 14 2010 | 11:44am ET

A pay-to-play scandal involving alternative investment firms continues to haunt a New York public pension fund, and the private equity firms that hope to do business with it.

For the fourth consecutive month, the New York State Common Retirement Fund did not allocate a dime to p.e. The pension has continued to shun the asset class despite its strong performance last year, when CRF’s private equity portfolio returned 11.6%, HedgeFund.net reports.

New York completely re-jiggered its alternative investments portfolio following a damaging scandal in which several major firms, including the Carlyle Group and Quadrangle Group, were accused of paying kickbacks and political contributions to win mandates from the pension fund. Several of the firms, including Carlyle and Quadrangle, have agreed to settlements to close the books on their roles—and foreswearing the use of placement agents. Several former New York officials and at least one hedge fund manager have been arrested and charged in the scam.

Despite the involvement of both hedge funds and p.e. firms in the pay-to-play scandal, the CRF has been less reticent to invest with the former. While the pension invested only $7 million with hedge funds in April, it has poured several hundred million dollars into hedge funds this year.


In Depth

An Interview With Harvest Volatility Management's Rick Selvala

Mar 23 2017 | 5:39pm ET

Several years of extremely low interest rates have pushed some investors into equities...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

SEI: Private Debt Coming Into Its Own

Mar 8 2017 | 9:24pm ET

The explosive growth of private debt over the past few years has caused the lines...