PA Teachers pension delays vote on Oak HC/FT fund amid board talk of conflict

Pennsylvania Public School Employees’ Retirement Board tabled a $100 million commitment to Oak HC/FT’s fifth growth fund after a board member raised concerns about a possible conflict of interest.

The decision comes as limited partners like PSERS are contending with a flood of managers coming back at quick pace for more capital into larger funds and even new products. Fundraising is as strong as it’s been over the past few years and any delay in a recommended commitment is an unusual development.

Public pensions, however, beholden to taxpayers and politicians, are more sensitive to potential reputational issues or situations with even a hint of a conflict. Pennsylvania’s teachers’ pension is especially on guard for conflicts as it’s been the subject of both FBI and SEC probes over its investment reporting after it admitted to inflating performance figures.

State Senator Katie Muth, a member of the pension board who has been critical of the pension’s investment management, asked investment staff to investigate whether the fund’s managers owned an entity that had contracted work with another department of the state government. Muth did not provide any specific details about the potential conflict.

The board will vote on the commitment via a notational ballot not requiring a public meeting after the staff has time to review Muth’s questions, according to a PSERS spokesperson.

Oak HC/FT Partners V LP was registered with the SEC at the start of March. It’s not clear how much the firm is targeting for the fifth fund.

A spokesperson from Oak HC/FT Partners did not answer questions regarding the fund, how much it is trying to raise, and Muth’s concerns by press time.

Last year, PA Schools committed $100 million to the Oak HC/FT Partners IV fund. The decision to invest in that fund also came after some debate due to concerns about co-founder Ann Lamont’s marriage to Connecticut Governor Ned Lamont. Fund IV closed on $1.4 billion last year.

Oak HC/FT’s portfolio focuses on healthcare and fintech companies.

PA Schools has been mired in controversy over the past year after it admitted to inflating investment performance figures, along with probes from both the Federal Bureau of Investigation and Securities and Exchange Commission into its dealings.