CEO abruptly resigns from board after leaked emails allegedly show inappropriate influence
Gabrielle “Ellie” Rubenstein, daughter of Carlyle Group Inc. co-founder David Rubenstein has resigned from the board of Alaska’s sovereign wealth fund following allegations she improperly interfered in investment decisions.
Her departure from the Alaska Permanent Fund, where she serves as vice president, will be effective Aug. 1, she announced at a board meeting Wednesday, surprising some trustees.
Part of her job as a board member was to introduce staff to potential investment managers the fund might want to do business with, and ultimately the fund did not invest with anyone she introduced, a spokesman for Rubenstein said Friday.
The nature of the disclosure, which came in the middle of an hours-long meeting, highlighted discord among the six board members. Craig Richards, a trustee since 2017, expressed his frustration with the board’s conduct.
“What happened today was a coup,” he said in conclusion, noting that Rubenstein had been allowed to vote for a new leadership before announcing his resignation.
Adam Crum succeeded Rubenstein on Wednesday as vice chairman and chairman of the board of directors. Ethan Schutt also stepped down as chairman of the board and was replaced in that role by Jason Brune. Schutt will remain on the board.
“We changed the election date in a way that I didn’t know we did,” Richards said. “It’s now clear to me that this was probably done because Commissioner Rubenstein was resigning.”
The Alaska Permanent Fund, fueled by the state’s oil revenues, manages about $80 billion. It invests in stocks, bonds, private equity and other assets and makes annual payments to the state, which then pays dividends to Alaska residents.
The fund is overhauling its investment onboarding process and protocols for how the board communicates with staff. The board has approved some initial changes and will consider the full proposal in September.
Email Leak showed that Rubenstein arranged meetings between investment staff and managers she knew, including her father, and that the investment manager raised concerns about her potential conflicts of interest, according to reports earlier this year by Alaska Landmine and the Financial Times.
David Rubenstein is a Bloomberg contributor.
The emails have prompted investigations into the source of the leak and the allegations, and some board members, state lawmakers and the public have called for closer oversight, according to a report earlier this year by the Anchorage Daily News.
“The staff in particular have been through a strange time,” Ellie Rubenstein said at the meeting, and they deserve “a new leadership team.”
Rubenstein, who is also chief executive of private equity firm Manna Tree Partners, said she made the decision due to a lack of time to devote to the sovereign wealth fund, as well as the impact the controversy had on her health.
‘Incompatible’
Rubenstein’s spokesman, Chris Ullman, said she “concluded that the scope and pace of change required to fully institutionalize the fund did not fit her needs to lead the private equity firm.”
The fund typically makes decisions on board composition at its annual meeting in September, but has accelerated the process because of governance concerns. Richards said he was excluded from some private discussions among board members.
“Some of you may have had the conversation, but I didn’t,” Richards said. “Again, I found myself figuring things out in a meeting that had already been pre-determined.”
During the meeting, Rubenstein said she always followed policy.
“Don’t believe everything you read,” she said.
Brune and Crum were among the board members who thanked Rubenstein for her service and said they appreciated the investment expertise she brought to her role.
Alaska Governor Mike Dunleavy also praised her work at the foundation.
Her contributions “are both meaningful and impactful,” Dunleavy said in a statement. “She is an agent of change with her deep understanding of global financial markets.”
