NYC Pension Boosts Private Equity Program by $600 Million

Increase raises total assets in emerging managers initiative to $8.8 billion.

The $193.7 billion New York City Retirement System (NYCRS) has expanded its in-house emerging managers program in private equity by $600 million, raising the total assets dedicated to the program to more than $1.5 billion.

The expansion also increases the total assets committed to small and emerging investment managers for all asset classes to $8.8 billion, which is a 57% increase over the past five years. The private equity emerging managers program is one of a series of NYCRS initiatives aimed at increasing opportunities for smaller managers, including minority- and women-owned management firms.

The emerging manager program seeks managers for a range of asset classes, such as public equities, fixed income, real estate, infrastructure, hedge funds, alternative credit, and private equity. The program is intended to cultivate the growth and development of successful managers who typically do not have access to large institutional investors.

“It shouldn’t matter who you know or what your background is, if you can deliver for New York City retirees, you deserve a shot—and that’s what this program gives you,” NYC Comptroller Scott Stringer said in a release. “With direct investments to outstanding minority- and women-owned firms and other emerging funds, we’re diversifying our portfolio with a better balance of managers and strategies.”

According to the minimum criteria of the emerging manager program, managers must be “significantly experienced” investors who can generate competitive risk-adjusted returns and manage funds that may have shorter track records than more established managers. Other criteria include having institutional-quality operations with established front- and back-office systems, and risk management including reputable administrators, auditors, and an independent third-party pricing source where appropriate. 

Under the private equity emerging managers program, the system is seeking to invest in experienced and proven fund managers with a differentiated investment strategy that demonstrates an ability to generate superior risk-adjusted returns.

“We can’t let industry roadblocks dictate our strategies,” said Stringer. “We have to build pipelines for talent and for stronger investments.”

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