Gray & Co. resigned as investment consultant to the $1.2 billion Atlanta General Employees' Pension Fund, confirmed Yolanda Johnson, member of the board of trustees of the pension fund.
Gray & Co. has been advising the board of trustees on a month-by-month basis following the expiration of its contract on Dec. 31, 2010. The resignation is effective immediately.
Jim Beard, the city's chief financial officer and also a member of the board, confirmed on Sept. 27 that the board would be hiring a firm to conduct a forensic audit of Gray & Co.
“There's been a lot of media coverage of Gray & Co. in the last month or two, and the city wants to make sure it handles its responsibilities as fiduciary of the fund,” Mr. Beard said in a telephone interview at the time.
Trustee Angela Green filed a complaint with the Securities and Exchange Commission earlier this year arguing that the firm did not adequately reveal to the board that it was the manager of a private equity fund called GrayCo Alternative Partners II, to which the board had approved a commitment of up to $28 million in November.
Yolanda Foreman, co-CEO of Gray & Co., wrote in an e-mail: “While we are proud of the investment advice that we provided the Fund over the seventeen-year relationship, recent negative media attention has become a distraction for both parties. Therefore, we think it is in both parties' best interest that we end the relationship.”
“Many of our clients are not happy with the continued media coverage by the (Atlanta Journal-Constitution) which surrounds a compliant by a trustee that our alternative fund, GrayCo Alternative Partners II, which includes part of the firm name within the fund name, was not disclosed as a product of Gray & Company. The Board Chair, CFO and the Board's legal counsel signed an LP agreement and subscription documents that clearly disclose the relationship between Gray & Company and GrayCo Alternative Partners,” Ms. Foreman wrote.
The pension fund recently issued an RFP for an investment consultant that was due Monday.