Report of Independent Counsel to SEC: Placement Agent Abuses at Kentucky Retirement System

Abstract

Findings are that KRS should seek to recover the millions in undisclosed placement agent fees paid by KRS’ managers from the placements agents and the managers. However, given the over $1.3 billion in KRS assets potentially involved, investment-related damages well in excess of the placement agent fees discovered to date likely exist and may be recoverable. The paper also finds that the previous review by the Kentucky State Auditor of Public Accounts was inaccurate and had numerous omissions.

Keywords: public pensions, pension, state retirement funding, placement agents, hedge funds, private equity

JEL Classification: H55