Investment experts at Pennsylvania’s biggest pension plan told the fund’s board last week that it had only a month to decide whether to put money into a promising financial fund run by Florida-based DigitalBridge Inc.

In a report to the board, the PSERS fund’s investment chief, James H. Grossman Jr., also described DigitalBridge’s fund as especially socially responsible. Grossman suggested a possible investment of $100 million.

The trouble is, two weeks before Grossman’s Aug. 6 report, DigitalBridge’s founder was arrested on federal charges of acting as a secret lobbyist for a Middle Eastern country. The indicted financier was billionaire Thomas Barrack Jr., a close political ally of former President Donald Trump’s.

This week, PSERS sought to walk back the report, saying that its investment chief had not urged the plan to invest in the Barrack-backed fund. Fund spokesperson Steve Esack said the listing was not a recommendation and that the staff’s review had occurred before Barrack’s arrest.

Moreover, Esack added, “staff has since deferred further action on the fund.”

This turnabout came as PSERS showed signs that it may have reached at least a temporary consensus after a fierce debate over the investment strategy for its $70 billion fund that put its management, highly paid investment staff, and their board allies against a minority bloc of board dissidents. The debate grew so pitched that dissidents tried unsuccessfully in June to fire Grossman and fund executive director Glen Grell over the plan’s lackluster profits.

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Grossman — the highest-paid employee in state government, making $485,00 yearly — argues that such private “alternative” investments are a wise and potentially lucrative part of a balanced fund portfolio.

The critics counter that these bets are notable mainly for their high fees, and that PSERS’ investments have performed poorly compared with its peers. They prefer unexciting but cheap “index” funds made up of publicly traded stocks and bonds.

At a board meeting Wednesday night, the 15-member panel broke through a recent logjam over the issue.

After two months of delaying votes on more than $1 billion in alternative investments, the panel approved two new investments. The board voted to put $200 million into a new fund from Insight Partners, a venture capital firm based in New York City; and $150 million into a new fund from Summit Partners, a private equity firm founded in Boston.

Three dissident board members did not vote to approve the investments. State Sen. Katie Muth (D., Chester), an outspoken board critic of PSERS management, voted against them. Abstaining were State Treasurer Stacy Garrity and her predecessor as treasurer, Joe Torsella.

“There is no dispute that PSERS has too much invested in private equity,” Garrity said Thursday. “As a result, we should be taking serious steps to reduce PSERS’ exposure.”

» READ MORE: Pa. Treasurer Joe Torsella tried to reform the state’s biggest pension funds. Then he lost his job.

These were repeat investments for PSERS. Before Wednesday’s vote, the pension plan had put a total of about $600 million into other financial instruments run by the two firms over the last decade. The firms say the investment will eventually pay back more than $1 billion.

Investment income is crucial to PSERS, the Public School Employees’ Retirement System. The plan, which sends $6 billion yearly in pensions to 250,000 retired educators, is financed by taxpayers, working teachers and other school staff, and investment profits.

Last year, the PSERS board voted to lower the fund’s overall stake in private equity, cutting it from 15% to 12% of its entire portfolio. At the meeting Wednesday, Garrity cited that policy shift to explain why she abstained over the two new investments.

Grossman, however, has cautioned against cutting back too quickly. In the same Aug. 6 document, he advised that the plan keep pumping as much as $900 million a year into new private equity instruments to provide a smooth “glide path” to replace older funds as they pay off.

He also warned that unless PSERS put the money down, it might be boxed out of good deals — or, as he put it, “losing access to strong, high-performing, high-conviction managers, who won’t be back in the market for a number of years.”

PSERS plans to keep at it. The fund board newly scheduled a special meeting Sept 1 — to vote on two more as-yet unidentified alternative investments.

As for DigitalBridge’s fund — called Digital Colony Partners II — Grossman had described it to the board as an “ESG forward fund,” using the acronym for companies that prioritize “environmental, social and governance” issues along with making money.

The discussion of the firm and possible $100 million investment was listed as a “deferred action item” among several possible investments in a new digital “dashboard” that Grossman showed the board. It permits staff and the board to see at a glance how the fund’s billions are invested and what investment decisions are pending.

In explaining that listing, PSERS spokesman Esack wrote: “Just because they are listed on the ‘deferred’ dashboard does not mean Mr. Grossman and his team ever presented/recommended the funds to the trustees’ investment committee/full board in a request for approval. It is a list of some investments that were being researched or were listed on a public meeting agenda for possible board consideration.”

Speaking of the Barrack investment, Garrity said, “the leadership of an investment group is a factor that should always be considered when making investment decisions.”

Barrack, 74, resigned from the board of DigitalBridge Group Inc., immediately after his arrest July 20. Barrack, who chaired Trump’s 2017 inaugural committee, was indicted on seven counts. He was charged with illegally lobbying Trump to help the United Arab Emirates and lying about it to federal agents. He failed to register as a foreign agent, the charges say.

His $250 million bail, among the highest imposed in U.S. history, was partly secured by his stake in DigitalBridge, from which he had stepped down from day-to-day leadership in April, before the charges were brought.

He still owns around 5% of the firm, records show. He won’t share in any PSERS-related profits from Digital Colony, according to a person with close ties to the company. The new fund hopes to eventually take in as much as $8 billion from investors.

In any event, at least one PSERS board member, Eric DiTullio, a school board member from the Pittsburgh area, has yet to rule out putting money into the company. He noted in an interview that Barrack had cut back his role.

“I won’t say it doesn’t matter,” said DiTullio, referring to Barrack’s arrest. “But you don’t want to throw the baby out with the bathwater.”