New York’s state employee pension fund continues to shift its equity investments to international markets, as the $300 billion New York State Common Retirement Fund committed $1.4 billion out of $2.3 billion in total investment commitments to emerging markets equities during the first two months of the year, according to the pension fund’s monthly transaction reports for January and February.
In January, New York Common allocated $700 million to MFS Investment Management’s MFS International Growth Equity fund, which invests in MSCI’s All Country World Index, excluding the U.S. The investment marks the first time the pension fund has worked with the asset manager.
New York Common also earmarked $550 million at the start of the year for investments within its credit portfolio, $350 million of which went to the Apollo Hybrid Value Fund III managed by Apollo Capital Management. The fund is a capital solutions fund that aims to earn equity-style returns with credit downside protection. The other $200 million was committed to Kennedy Lewis Management’s KLIM Delta Excelsior Fund, which seeks to create an opportunistic credit strategy through directly originated private, first lien, senior-secured, and performing loans.
Another $300 million was divided equally between two private equity funds managed by Leonard Green & Partners. The Sage Equity Investors fund looks to invest in consumer, business services, health care and industrial companies mainly in North America. Meanwhile, the Sage Equity Investors-A fund will invest additional capital alongside the Sage Equity Investors fund.
In February, New York Common committed $700 million within its public equities portfolio in two tranches of $350 million each to the RBC Emerging Markets Equity fund, managed by RBC Global Asset Management. The fund’s strategy is to invest in emerging market opportunities. It is the first time the pension fund has invested with the Royal Bank of Canada’s asset management arm.
More than $45 million was committed in February within the pension fund’s Emerging Manager Program, which invests in newer, smaller and diverse investment management firms.
The emerging manager investments included close to $17 million in the Demopolis Equity Partners Fund I private equity fund, which will target lower-middle-market, growth-stage, technology businesses in North America. It is the first time New York Common has worked with Demopolis Equity Partners.
The pension fund also committed $15 million to the Cross Rapids Capital Partners I fund, which is looking to invest in companies that are overlooked or undervalued, with a prioritization on buy-and-build, corporate carve-outs and structured-equity transaction strategies. It is New York Common’s first investment with Cross Rapids Capital.
Another $15 million within its emerging managers program was allocated to the Palm Peak Capital Fund, which looks to make control-buyout investments in lower-middle-market businesses in North America’s industrial and services sectors. This is also the first time the pension fund has worked with Palm Peak Capital.
Within its private equity portfolio, New York common earmarked $25 million to the Oceans Ventures Fund III, which will target early-stage technology and technology enabled companies, primarily in North America. Oceans Ventures Management is also a new relationship for the pension.
Under its real estate portfolio, the pension fund acquired a mixed-use building in Buffalo, New York, for almost $3.2 million. The building, which includes 17 residential units, is a renovation project with the Community Preservation Corp.
Tags: Asset Allocation, New York State Common Retirement Fund