An internal candidate has surfaced as a key contender for the head of the state pension fund, whose chief, Michael Travaglini, on Monday said he will leave in June for a job with a hedge fund.
Karen E. Gershman, the $44 billion fund’s chief financial officer and chief operating officer, is being recommended by the fund’s administration committee, said three people briefed on the matter.
Gershman, an accountant by training, has been with the pension fund since 2001 and served as interim executive director in 2004. She has worked in the past for KPMG, the accounting firm, and as finance chief at private sector companies.
A spokesman for state Treasurer Timothy P. Cahill — who is chairman of the pension board and a candidate for governor — said the board would discuss succession plans Tuesday. “No decisions have been made,’’ said David Kibbe, the spokesman.
Gershman could not be reached for comment late yesterday.
Governor Deval Patrick’s administration, meanwhile, is pushing for an outside search for a new pension director, said a person briefed on the administration’s position. The governor controls three of the nine seats on the pension board.
Travaglini said this week that he is leaving to join Chicago-based Grosvenor Capital Management, in large part due to state pay constraints. He earned $322,000 in salary and a $63,000 bonus in 2008, but said proposals by the Legislature to cap bonuses when the fund loses money — as it did in fiscal 2009, its worst year ever — would limit the state’s ability to hire top investment talent.
Gershman would be paid salary of $280,000, said two of the people.
The pension fund has struggled in the past to hire pension chiefs from the private sector, where the pay is much richer. Promoting Gershman would eliminate the pay problem, said two people involved in talks about Travaglini’s successor.
Travaglini will become managing director for business development at Grosvenor, pitching the hedge fund manager’s services to public pension funds.
Grosvenor won a contract with Massachusetts to manage about $450 million in 2006, on Travaglini’s watch. That sum has grown to about $675 million, according to the pension fund.
Travaglini disclosed in April to the treasurer and State Ethics Commission that he was talking to Grosvenor about a job, as well as to Bank of New York Mellon, and would recuse himself from decisions regarding them, State House News Service reported.
Beth Healy can be reached at bhealy@globe.com. 
