New Mexico Gov. Bill Richardson and the
The developments come in the wake of the pay-to-play scandal involving the
The alleged kickback scheme, which surfaced in mid-March, prompted New York State Comptroller Thomas DiNapoli to institute a ban on the use placement agents with regard to New York State Common on April 22. Other LPs, including the
The new policy for the New Mexico State Investment Council forbids investments with managers who use outside placement agents to market their fund or services. Managers who use internal marketing teams must disclose details of those relationships. Details of all third-party fees will be made public before investment finalization, including fees paid to attorneys, consultants, brokers, administrators and others.
The policy also prohibits managers or contract holders from making campaign contributions to elected or appointed officials who may have influence over the New Mexico State Investment Council or its advisory and oversight boards for the full term of the investment, as well as for two years before.
Penalties call for the New Mexico State Investment Council to recoup damages and repayment of management fees from any manager who does not fully disclose a financial benefit to individuals related to a state investment. These penalties bolster the law enacted last month that made failure to disclose third-party marketers a felony in New Mexico.
Meanwhile, the state pension fund made no commitments to private equity in April or May, and probably won’t make any for a while, until a new private equity adviser is hired, according to Charles Wollmann, public information officer for the New Mexico State Investment Council. Last month, on the order of Gov. Richardson, the state LP cut ties with
Wollmann also said that the limited partner intends to redo the due diligence on the funds that were recently recommended by the private equity committee. —Nancy Gordon