Moseley Quits StepStone, Had Become an “Unnecessary Distraction”

Stephen Moseley has stepped down as president of private equity consultant The StepStone Group, after being identified in news reports as a player in the New York kickback saga. In his letter of resignation, Moseley said:

“I have been assured by the Attorney General of New York that I am not a target of the ongoing industry investigation. However, press reports have raised my name, creating an unfair and unnecessary distraction for all of us.”

The reports Moseley refers to include a May 3 piece by Pensions & Investments, which claims Moseley was the unidentified Pacific Corporate Group executive named in state indictments against David Logisci and Hank Morris. It reads, in part:

The New York state charges against Messrs. Morris and Loglisci allege that a PCG managing director helped create a co-investment vehicle with hedge fund manager Clinton Group Inc. — at the suggestion of Messrs. Morris and Loglisci — solely for the giant New York state pension fund, allegedly giving Mr. Morris and Barrett W. Wissman, a Dallas-based hedge fund manager, a free 10% ownership in the new fund. (Mr. Wissman has pleaded guilty.)

Although the PCG executive was not identified in the indictments, Stephen Moseley left his post at PCG Capital Partners, PCG’s investment management arm, in September 2006. A month later the New York State fund committed $750 million to the new co-investment vehicle and in December 2006 Mr. Moseley went to work as the managing director for Estes Management LLC, a private equity subsidiary of Clinton Group to run the fund’s day-to-day operations. Last year, Mr. Moseley joined three other former PCG colleagues at StepStone Group LLC.

StepStone CEO Monte Brem, himself a PCG alum, issued a statement: “I have worked with Steve for nine years and value him greatly as a colleague. We appreciate the difficult decision Steve has made to step down and the concern he has shown for the firm and its employees.”

Brem declined to comment further, as did Moseley.