Louisiana State Severs Ties With Aldus Equity

The $8.7 billion Louisiana State Employees Retirement System on May 22 terminated its relationship with Aldus Equity Partners because of allegations that one of its founders took part in a multimillion-dollar kickback scheme. The pension fund has about $125 million committed via its relationship with Aldus Equity.

“Aldus has handled some private equity investments for LASERS, which proved very successful for the system and its members and the state of Louisiana,” said Cynthia Rougeou, executive director of the pension fund, in a prepared statement, “However, once the allegations involving Saul Meyer surfaced at the end of last month, we immediately suspended any new activity with Aldus and asked for their letter of resignation, which we have received.”

The pension fund is working with its consultant, NEPC, and is already having discussions with other private equity firms about managing the investments going forward.

The Securities and Exchange Commission filed civil charges against Aldus Equity Partners in late April, alleging that Meyer and the firm were part of a kickback scheme to win investment business from the New York State Common Retirement Fund. In a parallel criminal action, New York State Attorney General Andrew Cuomo filed a criminal complaint against Meyer.

As of Dec. 31, 2008, Lousiana had an actual private equity allocation of 11.6 percent, with a target allocation of 10 percent, and a range of 7 percent to 13 percent. Late last year, the state committed $50 million to Adams Street Partnership 2009 Global Offerings Fund; $50 million to Pantheon Europe Fund VI; $30 million to Parish Capital Europe Fund II; and $50 million to Siguler Guff Distressed Opportunities Fund III.