Aldus Equity partner Saul Meyer was arrested this morning for his alleged role in the New York kickback scandal, but Aldus isn’t the only firm on Meyer’s resume with troubled ties to state pension funds.
Meyer got his start at Holbein Associates, a general investment consulting firm based in Dallas. At Holbein, Meyer arranged commitments in multiple fund sectors, including leveraged buyouts, mezzanine and real estate. He and a colleague left in 2003 to form Aldus Equity, but one year later Holbein was implicated in ethics violations that occurred between 1999 and 2001.
At issue was Holbein’s advisory relationship with the Teachers Retirement System of Louisiana, which had plunked down a whopping 38% of its investment portfolio into alternatives (for context, typical state systems have 15% exposure). According to the Louisiana State Ethics Board, Holbein accepted illegal gifts and entertainment from firms seeking to receive fund commitments from TRSL. Among those firms was Hicks Muse Tate & Furst — which received the system’s largest-ever commitment.
After Holbein was found in violation, it was forced to reimburse Hicks Muse.
It’s also worth noting that Holbein namesake Richard Holbein also reportedly introduced the Arkansas teachers pension fund to Enron CFO Andrew Fastow, leading the fund to commit $30 million to one of the fraudulent company’s off-balance-sheet funds.
None of this information implies anything about Aldus and Meyers’ guilt or innocence in the New York State Common pay-for-play scandal. Nor has Holbein ever been accused of fraud, and he no longer handles Louisiana teachers’ private equity investments. Just consider it some context.
Get more details on Aldus and the New York Kickback Scandal here.