A CEO abruptly resigned from a board after leaked emails reportedly showed inappropriate influence

Gabrielle “Ellie” Rubenstein, a daughter of Carlyle Group Inc. co-founder David Rubenstein, resigned from the board of Alaska’s sovereign wealth fund following allegations that she improperly interfered with investment decisions. 

Her departure from the Alaska Permanent Fund, where she was vice chair, takes effect Aug. 1, she announced at its board meeting Wednesday, surprising some of the trustees.

Part of her job as a board member was to introduce staff to potential investment managers that the fund might want to do business with, and ultimately it didn’t invest with anyone she had referred, a spokesman for Rubenstein said Friday. 

The nature of the disclosure, coming in the middle of an hours-long meeting, underscores the discord among the board’s six members. Craig Richards, a trustee since 2017, expressed his disappointment in the board’s behavior.

“What occurred today was a coup,” he said in closing comments, noting how Rubenstein had been allowed to cast a vote for new leadership prior to announcing her departure.

Adam Crum succeeded Rubenstein Wednesday as vice chair as well as chair of the governance committee. Ethan Schutt also stepped down as board chair and was replaced in that role by Jason Brune. Schutt will remain on the board. 

“We changed the date of when we do our election in a way that I didn’t know we were doing it,” Richards said. “It’s clear to me now that it was probably done because Trustee Rubenstein is resigning.”

Alaska Permanent Fund, which is fueled by the state’s oil revenue, manages about $80 billion. It invests in stocks, bonds, private equity and other asset classes and makes annual payments to the state, which in turn disburses dividends to Alaska residents.

The fund is overhauling its process for investment referrals and protocols for how the board communicates with staff. The board approved some initial changes and will consider a full proposal in September. 

Leaked emails showed that Rubenstein had set up meetings between investment staff and managers she knew, including her father, and that the chief investment officer had raised concerns about her potential conflicts of interest, according to reports earlier this year by the Alaska Landmine and Financial Times. 

David Rubenstein is a Bloomberg contributor.

The emails prompted investigations into the source of the leak and the allegations, and some board members, state lawmakers and members of the public called for more scrutiny, according to a report earlier this year by the Anchorage Daily News. 

“The staff especially has gone through a weird period,” Ellie Rubenstein said at the meeting, and they deserve “to have fresh leadership.” 

Rubenstein, who’s also chief executive officer of private equity firm Manna Tree Partners, attributed her decision to not having enough time to dedicate to the sovereign wealth fund, as well as the toll that the controversy has taken on her health.

‘Not Compatible’

She “concluded that the scope and pace of change necessary to fully institutionalize the fund are not compatible with the demands of leading her private equity firm,” said Rubenstein’s spokesman, Chris Ullman. 

The fund normally makes decisions about the board’s composition at its annual meetings in September, but it accelerated that process because of the governance concerns. Richards said he had been excluded from some private discussions among board members. 

“There might have been talks among some of you, but there’s been no talks among me,” Richards said. “Once again, I find myself figuring out stuff at a meeting that’s already been pre-decided.”

Rubenstein said during the meeting that she had always followed policy. 

“Don’t believe everything you read,” she said.

Brune and Crum were among board members who thanked Rubenstein for her service and said they appreciated the investing expertise that she brought to her role. 

Alaska Governor Mike Dunleavy also praised her work at the fund.

Her contributions “are both significant and impactful,” Dunleavy said in a statement. “She has been an agent of change thanks to her astute understanding of the global financial markets.”

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