New Mexico State Investment Council suspended Aldus Equity as its private equity consultant pending a full review of Aldus investment relationships, said Charles Wollmann, public information officer for the Santa Fe-based $11.5 billion council. No timetable has been set for the review.
The council, which took the action last week, has not selected a replacement, but it might use its interim general investment consultant, NEPC, he said. No timetable has been set for a selection.
Separately, the council learned at its board meeting last week that Henry Hank Morris is among a number of marketers who received payment from investment managers for marketing their funds to the council. Mr. Morris on March 19 was charged with fraud by New York Attorney General Andrew Cuomo in an alleged pay-to-play scheme involving the $138.4 billion New York State Common Retirement Fund, Albany, according to the interim results of an ongoing internal investigation by the council asking all their investment managers for information on who their marketers and placement agents are and what they are paid, Mr. Wollmann said.
Mr. Morris earned $150,000 by obtaining a $20 million commitment by the council to the Carlyle Mezzanine Partners I fund in 2004 and an undisclosed amount by obtaining a $20 million commitment to Quadrangle II in 2005.
The investigation also found that the council paid undisclosed fees to Dan Weinstein, managing director of Wetherly Capital Group, a placement agency firm that is mentioned but not charged with wrongdoing in the New York indictments.
A new state law signed in April requires the council to get information on marketers and placement agents and their fees from all investment managers. However, the council may go beyond the law and require all parties in the investment process including accountants, consultants and administrators to give information on people they pay for marketing, Mr. Wollmann said.
Separately, the New Mexico State Investment Council earned 4.1% on its investments for March, -1% for the quarter and -24.1% for the year ended March 31, according to a performance report. Large-cap equities were the best performer, earning 8.6% for the month.