NY State Pension Invested $2.7 Billion in Alts Just Before Market Tanked

In a move that could prove rather timely as global stock markets continue to tumble from the impact of the COVID-19 pandemic, the $210.5 billion New York State Common Retirement Fund (NYSCRF) last month made commitments totaling nearly $2.7 billion into alternative investments, while declining to add anything to its global equity portfolio.

The lion’s share of that $2.7 billion has been committed to private equity investments, including $2 billion into the Neuberger Berman NYSCRF NB Co-Investment Fund II. That investment is comprised of two tranches of $750 million and one tranche of $500 million. The objective of the fund is to opportunistically co-invest primarily alongside the fund’s private equity managers.

Also within the private equity portfolio, the fund committed $200 million to Vista Equity Partners’ Vista Foundation Fund IV, L.P. The fund will focus on enterprise software companies that provide mission-critical solutions to various end markets.

And its final private equity investment for the month was for $15 million through the Hamilton Lane/NYSCRF Israel Fund, L.P., which invests in established and emerging managers in Israel, focusing on investments primarily in the life sciences and technology sectors.

Within its real estate portfolio, the fund invests with real estate opportunity funds, affordable housing, mortgages, and joint ventures with a property-specific mandate. Investment activity includes new commitments to general partners, investments made through joint ventures and affordable mortgages. The fund made three real estate investments in February.

The largest real estate investment was a $200 million commitment to the Westbrook Real Estate Fund XI, L.P, plus a $100 million commitment to a co-investment vehicle. The Westbrook Real Estate Fund XI is the latest in a series of value-added global commingled real estate funds managed by Westbrook Partners that invests in real estate in North America, Europe, and Japan.

The NYSCRF also funded a mortgage of just under $2.9 million in a 96-unit affordable housing property in Webster, New York, under an agreement with the Community Preservation Corporation, which is a nonprofit affordable housing and community revitalization finance company. NYSCRF also funded a mortgage of more than $500,000 in a six-unit affordable housing property in Potsdam, New York, which was also under its agreement with the Community Preservation Corporation.

And within its real assets portfolio, the fund made a $150 million commitment to the SASOF V LP fund managed by Carlyle Aviation Partners. The fund is a closed-end aviation assets fund focused on acquiring, managing, and leasing in-production, mid-life aircraft and engines. The NYSCRF invested another $100 million in the Brookfield Infrastructure Fund IV CO-INVEST, L.P., which will invest in renewable co-investment opportunities offered by Brookfield Infrastructure Fund IV, which include solar, wind, hydro, and battery storage.