Los Angeles Fire & Police Pension Fund today terminated Aldus Equity Partners as its core private equity consultant, giving staff 90 days to select a new consultant through an RFP process.
Also, Sean Harrigan resigned as chairman of the $9.5 billion fund’s board, saying that local media “has placed me at the eye of the storm” concerning investigations in other states into pay-to-play allegations. Mr. Harrigan has not been charged with any wrongdoing.
“The recent arrest and indictments involving the New York state pension system, a former chief investment officer of that system, a third-party marketer and a consultant has created a frenzy of media activity and SEC inquiries involving a number of public plans across the country. Unfortunately for me … the local media has placed me at the eye of the storm,” he said at the end of the board meeting.
The SEC has asked Mr. Harrigan for information and documents concerning any relationships he might have with investment consultants and placement agents.
The board designated staff to perform Aldus’ consulting duties in the interim, rejecting the suggestion of two board members, including Mr. Harrigan, to temporarily appoint StepStone, a specialty private equity consultant.
Aldus issued a statement that said the system's private equity portfolio "is in a much stronger position than when Aldus took over as the core private equity manager. Aldus has served LAFPP with the highest degree of professionalism, integrity and transparency."
In other action today, the board adopted a new 3% allocation to an opportunistic asset class that initially will include debt. Funding will come from the system’s domestic large-cap equity allocation, which is currently 28.9%. No RFPs for managers are planned.
The board also gave its staff and general consultant Pension Consulting Alliance 90 days to draft a private equity policy and an alternative investment disclosure policy concerning the use of placement agents.
