New York City Comptroller William C. Thompson, Jr., on behalf of the New York City Pension Funds, issued the following statement after a majority of investors in the embattled Quadrangle Group elected to retain their financial commitments to the private equity fund.

“I am disappointed that a majority of Limited Partners did not see fit to vote to terminate the investment of monies to a fund that is under such a cloud and stand firm in my position that the City Pension Systems acted appropriately in voting to terminate any such further investments,” Thompson said.

Both New York State and New York City had opposed such a move, citing the investigation by the New York State Attorney General regarding the Hank Morris matter when voting Friday to terminate the authority of Quadrangle Capital Partners II LP to make new investments on behalf of the partnership.

Three of the New York City Pension Funds – New York City Employees’ Retirement System, Teachers’ Retirement System and the Police Pension Fund - invested a total of $125 million in Quadrangle in 2005 and 2006. At no time did the Pension Funds’ consultant ever identify Hank Morris or Searle & Company as a placement agent for Quadrangle. In fact, in its response to a due diligence questionnaire issued by the Pension Funds’ consultant, Quadrangle identified only Helix Associates Limited and Monument Group as its placement agents.

Friday’s vote by Quadrangle investors – including the three city Funds – determined whether investors would continue to provide capital for new investments by Quadrangle. The vote was triggered by the departure of Steven Rattner, a “key person” at the fund. Rattner left the firm earlier this year.

The vote came after the Comptroller’s Office requested that Quadrangle extend Friday’s deadline, and Quadrangle refused. This extension would have allowed additional time to access the impact of information that has recently come to light regarding Quadrangle’s payment of placement agent fees to an affiliate of Hank Morris and its lack of timely disclosure on this point.

Under the terms of the partnership agreement, the commitment period now will continue because a majority of the limited partners did not elect to terminate the commitment period.

Trustees of the three funds (chairs in bold) are:

New York City Employees’ Retirement System: New York City Finance Commissioner Martha E. Stark (Chair); New York City Public Advocate Betsy Gotbaum; Borough Presidents Scott Stringer (Manhattan), Helen Marshall (Queens), Marty Markowitz (Brooklyn), James Molinaro (Staten Island), and Acting Borough President Earl D. Brown (Bronx); Lillian Roberts, Executive Director, District Council 37, AFSCME; Roger Toussaint, President Transport Workers Union Local 100; and, Gregory Floyd, President, International Brotherhood of Teamsters, Local 237.

Teachers’ Retirement System: New York City Finance Commissioner Martha E. Stark (Chair); Deputy Chancellor Kathleen Grimm, New York City Department of Education; mayoral appointee Tino Hernandez; and, Sandra March, Melvyn Aaronson and Mona Romain, all of the United Federation of Teachers.

New York City Police Pension Fund: Mayor Michael Bloomberg; New York City Finance Commissioner Martha E. Stark; New York City Police Commissioner Raymond Kelly (Chair); Patrick Lynch, Patrolmen’s Benevolent Association; Michael Palladino, Detectives Endowment Association; Edward D. Mullins, Sergeants Benevolent Association; Thomas Sullivan, Lieutenants Benevolent Association; and, Roy T. Richter, Captains Endowment Association.

###