New York City loses its private equity boss

May 22, 2013, 6:58 PM UTC

FORTUNE — Yesterday came news that Barry Miller had stepped down as head of private equity investments for the New York City Employee Retirement Systems (NYCERS), in order to open a New York City office for Connecticut-based private equity firm Landmark Partners.

My immediate reaction: Is this a conflict of interest, given that NYCERS had just committed $400 million to Landmark’s latest secondary fund?

So I looked into it and think that appearances are deceiving.

Here are some mitigating factors:

  1. 1. NYCERS first approved the commitment back in December, while all indications are that Landmark and Miller didn’t begin conversations until late January.
  2. 2. NYCERS has invested in Landmark funds since 2002, including a $200 million commitment in 2008 (before Miller joined). Yes, the new commitment is larger, but so is Landmark’s target. Moreover, NYCERS has been ramping up its PE commitments under Larry Schloss ($1.1 billion total in Q1).
  3. 3. Finally, Miller is not a longtime public employee looking to cash in via the private sector. Before joining NYCERS, he had worked with secondaries firms Nottingham Capital Management and Pomona Capital.

To be sure, there will be restrictions on Miller going forward. For example, he cannot be Landmark’s liaison with NYCERS until June 2014. And he cannot share confidential NYCERS information with Landmark. On the other hand, it appears that he can work on the fund that includes NYCERS commitments. I asked a spokeswoman for the NYC Comptroller’s Office about that, but she declined to specifically comment.

But the big issue going forward for NYCERS isn’t Miller per se. It’s who might replace him, managing billions of dollars on behalf of New York City pensioner.

Remember, Miller’s position was vacant for several years before Miller was hired – in part due to mismanagement, and in part due to some restrictive job requirements (including NYC residency). As of right now, there is no successor for when Miller packs up his desk at the end of this month.

Sign up for Dan’s daily email newsletter on deals and deal-makers:

Subscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up today.