Outgoing board chairman Nicholas Maiale told peHUB the board had been working on a potential sale of private equity stakes in the months leading up to the departure of the system’s chief investment officer Anthony Clark. Clark left in late November amid allegations of misconduct involving hiding from the board losses in a hedge fund. Clark also has been accused of day-trading at work. The board has authorized an investigation of the allegations.
Maiale said in a recent interview while the claims, if true, would be ethical violations, they wouldn’t rise any higher than that.
Meanwhile, a spokesperson for PA SERS wouldn’t confirm an impending secondary sale, only citing the recent investment strategic plan that listed a secondary sale as one of several options to get the system’s private equity allocation – at a huge 24 percent – down to 16 percent over 10 years. (The system’s actual allocation sat at 23 percent of total fund assets as of Sept. 30, 2013).
“Until the board acts, it is too soon to know (and inappropriate to speculate) which elements will be included in the final plan and how those elements may be implemented,” PA SERS spokesperson Pam Hile wrote in an email.
Other options include changing the annual $500 million funding limit for private market investments with commitments greater than five years, Hile wrote.
Chris Witkowsky is editor of peHUB