After less than two years at the helm, Russell Niemie, chief investment officer of New Jersey Police and Firemen’s Retirement System, has resigned.
Niemie is stepping down after a court case between two of his former employers revealed alleged conflicts of interest.
He was the first CIO to manage the New Jersey Police and Firemen’s $31 billion in assets, as the fund was separated from New Jersey’s larger pension system in 2018, Institutional Investor previously reported.
“The PFRS Board of Trustees accepted Russell Niemie’s resignation as chief investment officer, effective March 29,” said a spokesperson in an email on Wednesday. Niemie did not return a LinkedIn message seeking comment on his departure.
A court case between trustees of the New York State Nurses Association Pension Plan and White Oak Global Advisors over an investment management agreement sparked the resignation. A U.S. Southern District of New York judge closed that case on March 17. The litigation came on the heels of the non-public findings of an arbitrator.
Court documents filed on March 17 revealed that during Niemie’s time as CIO at NYSNA, he allegedly pursued employment at White Oak at the same time he recommended the investment management contract with the firm, which was an external manager to the Nurse’s plan, be extended. Niemie was not a defendant in the case. Instead, it included details about this conflict, as well as allegations that took place after his departure.
“Mr. Niemie’s joining of White Oak was disclosed to the plan,” a spokesperson for White Oak said via email. “However, there were no findings related to Mr. Niemie’s employment matters by either the arbitrator or the District Court.”
After Niemie departed the fund, NYSNA trustees investigated his work as CIO and “revealed allegedly undisclosed conflicts of interest,” and found “evidence that [he] allegedly had falsified expense submissions and time reports.”
The case is focused on arbitration between the two parties over the investment agreement, not Niemie’s decision to leave one for the other. However, the details revealed in the case were news to PFRS.
The PFRS board learned about the court case on Friday, March 18, after the judge had made his ruling on the case, according to the spokesperson. The dispute had taken place in arbitration but was brought to the court — with records sealed — in October 2021. The judge’s ruling on March 17 revealed more details about the case.
A spokesperson for the board said that once it learned about the allegations, it immediately commissioned outside counsel Windels Marx to review and investigate it.
The board is now working to retain an executive consulting firm to search for its new investment chief. Korn Ferry conducted the prior CIO search, Institutional Investor previously reported.
Niemie had worked as NYSNA’s CIO for 16 years starting in 2000. He left to become vice chairman and partner at White Oak in 2016 and remained at the firm until October 2019. One year later, he started his tenure at PFRS.