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Update: State Pension fund searches for private-equity director
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Ed Hennessee, Assistant to the Treasurer for employee benefits and insurance

Update 0925 Oct. 8: Asst. Treasurer Hennessee said this morning the hiring of the PE director is not in jeopardy: "The state is permitted to hire critical positions and this would be one," he wrote.-Ed.

As originally reported:

Four months after Gov. Phil Bredesen signed the law that made it possible, the State's pension-fund executives are actively recruiting a first-ever director of private-equity investments -- investments that could total $900 million over the next few years.

Response to recruitment ads placed by Tennessee Consolidated Retirement System in Pensions & Investments and other financially oriented media has been strong, according to TCRS staff, with the application deadline now set at Oct. 15.

Although state government is under a hiring and salary freeze, with layoffs possible over the horizon, VNC could not determine prior to deadline whether or not state austerity measures will allow State Treasurer Dale Sims, TCRS Chief Investment Officer Michael Brakebill and committees that oversee and advise TCRS to proceed with the strategic appointment. This story will be updated, as warranted.

As originally reported by VNC, the General Assembly passed legislation last spring that gave TCRS freedom to invest in private-equity funds. Since then, TCRS assets have declined in value in the face of market turbulence, but industry reports suggest TCRS' lost ground was mainly in three equities and TCRS has thus far made only limited changes in portfolio management.

The legislature and the Bredesen Administration supported a change in state law, partly because TCRS fund performance was found to be underperforming relative to peer funds that engaged in private-equity investment. 

Since the law changed, some executives with Tennessee-based venture capital and private-equity funds have expressed hope that TCRS will in some manner allocate a portion of funds for investment via native funds. However, Assistant Treasurer Ed Hennessee subsequently made clear no "earmarks" will be incorporated in the investment plan, which will be oriented toward maximizing portfolio returns.

In response to a VNC request, TCRS provided details of the job description for the director-private equity. The new director would report to CIO Brakebill, and would be responsible for creating and implementing "a well defined strategic plan" and operating guidelines for private-equity investing.

The director would also lead the effort to recruit an outside PE investment advisor, and would work with the outside PE advisor to produce analyses of individual investments and establish portfolio structure.

The job profile also stipulates:  "Minimum qualifications include a Bachelor’s degree (MBA or appropriate advanced degree preferred) and a minimum of five years experience in the investment management field.  Candidates should demonstrate knowledge and experience in alternative investment management and possess strong leadership and communication skills. The Chartered Financial Analyst (CFA) or Chartered Alternative Investment Analyst (CAIA) designation is strongly preferred." ♦

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Tags: Dale Sims, Eddie Hennessee, Michael Brakebill, pension, Phil Bredesen, private equity, Tennessee Consolidated Retirement System, venture capital

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