Jim Hudson, chief of staff for the state Department of Commerce, on Monday withdrew his application to become the next executive director of the Arkansas Teacher Retirement System.
Near the end of its quarterly meeting on Monday, the system's board of trustees met in a closed executive session for about 20 minutes to consider the candidates for executive director before board Chairman Danny Knight announced the trustees would meet Thursday morning to discuss the candidates more.
After the meeting, Knight said the trustees haven't yet selected who they want to hire as executive director.
On May 13, Knight had indicated that the trustees were leaving the door open to the possibility of interviewing some executive director candidates a second time after they selected eight candidates for interviews.
However, Knight said Monday that "We did a secret poll to see if we need to continue with interviewing" the top candidates, and "we expect to reach a consensus [on who to hire] after an executive session on Thursday at 8 o'clock."
"We will announce an executive director nominee or hire on Thursday," he said. Three of the system's 15 trustees didn't attend the trustees' Monday meeting.
The teacher retirement system is state government's largest retirement system, with more than $20 billion in investments and more than 100,000 working and retired members.
Hudson said Monday in an email to system Human Resources Manager Vicky Fowler that after "Spending some time this weekend in prayerful reflection on the executive director position at ATRS, I truly believe this isn't the right opportunity for me at this time."
"Therefore, I am withdrawing from consideration for the opening," Hudson wrote.
He wrote in his email to Fowler: "Please pass along to the trustees, my sincere appreciation for their consideration of me for the position and the time they took to interview me last Friday. I am certain that among the remaining candidates they will be able to find their next director."
The seven other candidates that the trustees have interviewed for the executive director post include:
State Department of Human Services Chief of Staff Mark White, who served stints as director of legal services at the Arkansas Public School Resource Center and a staff attorney for the state Department of Education.
Arkansas Tech University Governmental Affairs Director Gina Lockwood, who is a former chief operating officer at the state Department of Education.
State Treasurer Senior Investment Officer James Pulley.
Former state Rep. Michelle Gray, R-Melbourne, who is the executive director of practice transformation for the White River Health System.
Teacher Retirement System Information Systems Manager Michael Lauro Jr.
Teacher Retirement System Real and Alternative Assets Investment Manager Jerry Meyer.
Teacher Retirement System Associate Director of Information Technology Mullahalli Manjunath.
The seven candidates for executive director were each interviewed by the trustees on May 22.
Fourteen applicants initially applied for the executive director's job before attorney Bud Cummins, who is a former U.S. attorney, withdrew his application.
"While I would relish this challenge if given the responsibility, upon reflection I have determined the timing is not good for me," Cummins wrote in an email to Fowler last month.
In mid-March, the system's then-executive director, Clint Rhoden, announced his resignation after 4½ years in the post, citing personal reasons. He departed the system on April 28.
Deputy Director Rod Graves has been serving as interim executive director.
The salary range for the executive director's post is $149,682 to $181,500 a year and is commensurate with qualifications and experience, according to the advertisement for the job.
The minimum qualifications for the post include at least five years of executive experience reporting to a corporate or public board; an advanced degree in business administration, educational administration or a related field; demonstrated leadership qualities, highly effective communication skills and a customer service orientation; knowledge of pension law; and a minimum of three years of experience working with retirement systems and investments, according to the job posting. Other job-related education, experience, or both education and experience may be substituted for all or part of these qualifications with the approval of the system's board, the posting said.
During the past 20 years, the teacher retirement system has hired two former state lawmakers and promoted Rhoden, the system's then-associate director of operations, to head the agency.
George Hopkins, who served as the system's director from December 2008 through November 2018, is a former Democratic state senator from Malvern. David Malone, a former Democratic state senator from Fayetteville, headed the agency from 2003-2007.
The system's investments started fiscal year 2023, which began on July 1, 2022, valued at $19.7 billion, according to the system's investment consultant, Aon. Fiscal 2023 ends June 30.
On Monday, Graves said that the system's investments are now valued at roughly $20.1 billion.
In the quarter that ended March 31, the teacher retirement system's investments increased by $506 million in value to $20.2 billion and earned an investment return of 3.8% to rank near the median among similarly-sized public retirement systems, Aon reported to the system's board of trustees.
The system's investment return in the first nine months of fiscal year 2023 was 6.2 %, ranking it among the top 12% of similarly-sized public pension systems, according to Aon.
"We are seeing some positive movement in the equity market in June far," Katie Comstock of Aon told the system's trustees. "We'll see how the rest of the month plays out."
The previous two fiscal years had been volatile for the system's investments.
In fiscal 2022, which ended June 30, 2022, the system's investments dropped in value by $1.4 billion to $19.7 billion amid declining stock and bond markets. That came after the system had its best investment performance ever in fiscal 2021, which ended on June 30, 2021. Amid a stock market boom, the system's investments gained $4.5 billion in value in fiscal 2021, reaching $21.1 billion.
In other business on Monday, the trustees approved a private equity investment of up to $30 million in New York-based KPS Capital Partners' KPS Special Situations Mid-Cap Fund II, L.P.
The fund will target underperforming, distressed or non-core assets or businesses and will seek to turn around or improve performance to achieve stability and profitability, and, subsequently, to grow both organically and through strategic acquisitions, according to the system's private equity consultant, Franklin Park.
The trustees also approved making up to a $50 million real estate investment in New York-based Blackstone Real Estate's Blackstone Real Estate Partners Europe VII.
The fund will invest opportunistically in real estate or real estate-related companies in western Europe, Aon reported. The fund may invest through equity, debt or other interests and Blackstone will target large complicated transactions such as public-to-private trades, which have limited competition and where Blackstone can move quickly to secure its position, according to Aon.