New York State prosecutors and the SEC are reportedly investigating whether the Carlyle Group made improper payments in exchange for investments from New York’s state pension fund. The NY Times reports that the inquiry focuses on the “widespread practice” among hedge funds and private equity firms of paying placement agents to gain business managing the pension funds run by states for public employees.
The Carlyle Group is among a group of firms under scrutiny, and currently manages $1.5 billion of New York’s pension assets. According to the NYT, Carlyle’s efforts to gain pension business in other states have drawn criticism before, but company officials have never been charged with any wrongdoing. Carlyle has denied any wrongdoing in the case.