* Ban stems from pay-to-play scandal
* Started with PE placement agents
* Comptroller Scott Stringer announces ban
By Steve Gelsi
NEW YORK, June 13 (Reuters-BUYOUTS) - The $150 billion New
York City Pension Funds approved a measure to expand a ban on
placement agents from private equity funds to all investment
classes, in a move that traces its roots to the pay-to-play
scandals of the late 2000s.
New York City Comptroller Scott M. Stringer, elected in
November on the ticket with Mayor Bill de Blasio, called the new
measure "an ironclad ban on placement agents for all
transactions" involving the New York City Pension Funds, a
measure he said was overdue. The city's private equity portfolio
is valued at more than $17 billion.
"Ending the involvement of intermediaries in pension funds'
transactions will ensure that the integrity and independence of
our investment decisions are beyond reproach and without
conflict," he said in a prepared statement.
The New York City Pension Funds system includes five
retirement pools: New York City Employees' Retirement System,
Teachers' Retirement System, New York City Police Pension Fund,
New York City Fire Department Pension Fund, and the Board of
Education Retirement System. The original ban on private equity
placement agents dates back to April 2009.
New York State Governor Andrew Cuomo led a probe of
corruption at the New York State pension system while he was
attorney general. Eight people pleaded guilty in the scandal,
including Elliott Broidy, founder of Markstone Capital Partners,
the Los Angeles-based private investment firm.
Many of the details of the pay-to-play scandal emerged in
2009, after alleged kickbacks were paid in return for contracts
to manage state pension money. Cuomo filed a 123-count
indictment in March of that year in New York State Supreme
Separately, New York City has yet to replace Barry Miller,
former head of private equity for the Big Apple pension system,
after he joined Landmark Partners last year.
(Buyouts Magazine is a Thomson Reuters publication. Editor: