NY State Pension Continues to Dial Back Its Stock Exposure

The New York State Common Retirement Fund exited more than $4.4 billion worth of public equity investments during the first 11 months of 2023, moving more into private equity and emerging managers.

The $246 billion New York Common Retirement Fund in November terminated a domestic equity fund worth $210 million to bring the total amount it has cashed out of public equity to more than $4.4 billion in 2023 through November.

The move is part of an ongoing trend by the pension giant to shift more of its investments away from public equity and into other asset classes such as private equity, credit, and real estate.

According to the pension fund’s monthly transaction report for November, it ended the Lisanti Capital Growth fund within its public equity portfolio, which had an account value of approximately $210 million at the time of termination.

Within its private equity portfolio, the pension fund also committed $75 million to the ICV Partners V fund. The fund will seek investments in the business services, health-care, consumer and food and beverage sectors primarily in the U.S.

Beyond PE, New York Common is focusing on affordable housing. Within its real estate portfolio, the pension fund earmarked approximately $4.2 million for the construction and gut rehabilitation of four residential buildings in Ithaca, N.Y., which together consists of 75 units. It also committed approximately $2.8 million to the construction of a four-story building that will provide 60 affordable housing apartments in Poughkeepsie, New York.

Also within its real estate portfolio, the CRF invested approximately $330,000 for the construction of two two-story buildings that contain four units of affordable housing in Schenectady, N.Y. And it committed approximately $292,000 for land that has received site plan approval for the construction of a four-story building that will contain 60 apartments in Lake Placid, N.Y.

In addition, New York Common is putting emphasis on its emerging manager program, which invests in newer, smaller, and diverse investment managers, the CRF committed $25.5 million to the Clearhaven Partners Fund II, through the NYSCRF Pioneer Partnership, which is advised by HarbourVest Partners, a partner within the program’s private equity asset class. The fund focuses on partnership-oriented control buyouts of lower-middle market software and software driven technology companies.

The CRF also earmarked up to $10 million under the emerging manager program to the Mandrake Capital Real Estate Fund II through the Empire GCM RE Anchor Fund/ GCM Grosvenor, which is one of the fund’s program partners within the real estate asset class. The fund will focus on build-to-rent sector and special situation opportunities in the commercial and residential real estate markets in the U.S.

And the pension fund committed up to $10 million to the Grandview Joint Venture III fund through the Empire GCM RE Anchor Fund/GCM Grosvenor, which is also one of its emerging manager program partners within the real estate asset class. The fund will pursue industrial and residential investments in the U.S.