The New Jersey Division of Investments has quietly sold its stake in a venture capital fund managed by General Catalyst Partners, following allegations of impropriety related to a political contribution from General Catalyst “executive-in-residence” and current Massachusetts gubernatorial candidate Charlie Baker.
Fortune has learned that the sale agreement was inked back in August, and closed within the past several weeks. It may be publicly disclosed tomorrow during an open State Investment Council meeting, and was discussed during an investment policy committee call last week. No word yet on the buyer, although a source says that the sale price was around 1.5x of cost.
Here was a brief backgrounder on the situation that we wrote back in May:
In that same post, we suggested that Baker and General Catalyst likely were in compliance with SEC rules but that he may well have violated the more-stringent New Jersey law.
One week later came word that NJ pension officials asked state attorneys to review the situation, with the job ultimately falling to the Treasury Department’s auditor. That report has not yet been finalized or provided to the SIC, which chose to sell the fund position anyway.
“If the report finds that there was a violation, then [DOI] would be forced to sell and might not be able to get the same price, so it made sense to sell now,” explains a source who was on the investment policy committee call. It remains unclear if the sale negates public release of the auditor’s report.
The General Catalyst fund includes investments in such companies as Snapchat and Warby Parker.
A spokeswoman for General Catalyst declined to comment, except to say that the firm has been cooperating with New Jersey. A NJ Treasury spokesman declined comment, while a Baker campaign spokesman has not yet returned a request for comment.
UPDATE: At the Tuesday NJ SIC meeting, the Council confirmed the secondary sale, and said that the buyer was Washington University.