LP corner, week of June 15, 2009

Louisiana State severs ties with Aldus Equity

The $8.7 billion Louisiana State Employees Retirement System late last month terminated its relationship with Aldus Equity Partners over its involvement in an alleged kickback scandal involving the New York State Common Retirement Fund. In April, the Securities and Exchange Commission filed charges against Aldus and Saul Meyer, its founding principal, in an alleged scheme to win business from New York Common. In a parallel criminal action, New York State Attorney General Andrew Cuomo filed a criminal complaint against Meyer.

The Louisiana State pension fund has about $125 million committed via its relationship with Aldus Equity.

“Aldus has handled some private equity investments, which proved very successful for the system and its members and the state of Louisiana,” said Cynthia Rougeou, executive director of the state pension fund, in a prepared statement. “However, once the allegations involving 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 in discussions with other private equity firms about managing the investments going forward.

Similar to Louisiana State, the New Mexico State Investment Council and the Oklahoma Teachers Retirement System have also recently ended their relationships with Aldus. —Nancy Gordon

Indiana Teachers pledges $8M to TA Associates

The Indiana State Teachers’ Retirement Fund has pledged $8 million combined to two separate funds managed by Boston-based TA Associates.

The state pension fund agreed to commit $5 million to TA XI. The fund, which is targeted at $3.6 billion, invests in technology, financial services, health care, business services and consumer sectors. TA Associates’ previous buyout fund, TA X, closed with $3.5 billion in commitments in March 2006. Fund X had an IRR of negative 13.1%, as of Sept. 30, 2008, according to data provided by the California Public Employees’ Retirement System.

Indiana Teachers also pledged $3 million to TA Subordinated Debt Fund III, which provides subordinated loans to mid-market growth companies.

Last year, the state committed to ABRY Partners Fund VI and New Enterprise Associates XIII. Other past commitments have gone to buyout firms, such as Bain Capital, Black Diamond Capital Management, The Blackstone Group, Charterhouse Capital Partners, GTCR Golder Rauner, Oaktree Capital Management and TPG.

As of Dec. 31, the actual allocation to private equity was 8.35%, compared to a target allocation of 10 percent. —Nancy Gordon

Alaska pledges $500M for fiscal 2010

The Alaska Permanent Fund Corp. approved a new private equity investment policy resolution in late May that includes a $500 million commitment for its fiscal year 2010, which begins July 1.

The amount will be divided between Boston-based HarbourVest Partners, a fund of funds manager hired in December to oversee a global private equity portfolio, and Pathway Capital Management, an Irvine, Calif.-based firm that currently manages two private equity portfolios for the limited partner. The exact split between the two managers hasn’t been worked out yet, says Laura Achee, spokesperson for the LP.

The LP’s target allocation to private equity is 6 percent. The actual private equity allocation stood at 2.4%, as of April 30. —Nancy Gordon