The latest chapter in the whistle-blower complaint by Jeffrey Baker against the San Diego County Employees' Retirement Association raises questions about the amount of control a pension fund relinquishes when it outsources all or some of its investment staff functions.
The control issue surfaced during a San Diego County Civil Service Commission hearing to decide whether Mr. Baker, formerly an investment officer at the $8.1 billion pension fund, should get his job back and if he is entitled to monetary damages. Commissioner Francesca Krauel, who presided at the hearing late last month, is expected to report back to the full commission, which is expected to make a determination at its March 7 meeting.
Mr. Baker also has a complaint pending before the California Department of Labor, which is investigating whether he was fired in retaliation for allegedly sounding the alarm that the pension fund had taken on too much risk in violation of its investment policy.
Integrity Capital Services LLC, founded by Lee Partridge, has been the fund's portfolio strategist, roughly performing the duties of an external chief investment officer, since October 2009. Mr. Partridge is now CIO of Salient Partners LP, Houston, which purchased Integrity Capital in November 2010. Salient took over as San Diego County's portfolio strategist, with Mr. Partridge still at the helm, and SDCERA's consultant.