New York State Common Earmarks $1.9B in September Investments

The New York State Common Retirement Fund committed nearly $1.9 billion in investment allocations to external managers in September, more than half of which was earmarked for its credit portfolio.

The $242.3 billion pension fund committed $600 million within its credit portfolio to the KLIM Delta Excelsior Fund, a fund of one managed by Kennedy Lewis Investment Management LLC. The fund is intended to pursue a flexible, all-weather, opportunistic credit strategy via directly originated private, first-lien, senior-secured, performing loans. Kennedy Lewis Management is a new relationship for the pension fund.

The NYSCRF also committed $375 million within the credit portfolio to the PIMCO Specialty Finance Income Fund, a commingled fund managed by Pacific Investment Management Co., also a new relationship for the pension fund. The PIMCO fund will target specialty finance credit, such as consumer and non-consumer loans, portfolios solutions and certain platform investments in specialty lenders and servicers.

Another $100 million was set aside within the credit portfolio to Pearl Diver Empire Fund, managed by Pearl Diver Capital LLP, a fund of one that invests in securities of collateralized loan obligations.

Within its private equity portfolio, the NYSCRF allotted $300 million to the Insight Partners XIII fund, which will target software businesses in a variety of end markets, but mainly in the business-to-business software sector and in North America.

The pension fund also committed $125 million to the Vistria Fund V, managed by the Vistria Group LP. The fund seeks investments in health care, education and financial services primarily in the U.S. Another $50 million will go to the Vistria SMA NYCRF Co-Invest fund, which aims to invest additional capital in high-conviction opportunities.

Within its opportunistic absolute return strategies portfolio, the pension fund earmarked $150 million for the H.I.G. Middle Market IV Co-Investment SMA fund managed by H.I.G. Capital LLC. The fund is a co-investment sidecar vehicle that will invest in certain co-investment opportunities along with the H.I.G. Middle Market L.B.O. Fund I, which seeks control equity investments in middle-market companies, mainly in the U.S.

Another 100 million euros ($107 million) was committed within the NYSCRF’s real assets portfolio to the AIP Co-Invest 2023B SCSp fund managed by Antin Infrastructure Partners. The fund is a closed-end fund targeting infrastructure investments in the energy and environment, telecom, transport and social sectors that will invest alongside the Antin Infrastructure Partners V fund.

Within its real estate portfolio, the pension fund invested approximately $40.3 million in

BlueLinkx Industrial Storage, an industrial storage facility in suburban Atlanta. Within its Emerging Manager Program, the pension fund committed up to $10 million to the Alpaca Real Estate JV I fund through the Empire GCM RE Anchor Fund managed by GCM Grosvenor, one of the NYSCRF’s emerging manager partners within its real estate portfolio.

Although it was not part of its September commitments, the NYSCRF also announced last week that it has committed $50 million to a private equity fund managed by Hamilton Lane aimed at supporting small businesses in the state. The New York Small Business Investment Co. Fund II provides credit, mezzanine and equity investments to small businesses in New York or with significant operations in the state. The fund is managed under the U.S. Small Business Administration’s SBIC program.

In addition to the investment commitments, the pension fund cashed out of the Ariel International Equity Fund, which had been in its public equity portfolio with a value of approximately $345 million.