New Jersey forms separate account with Siguler Guff

The $74bn pension is increasing its exposure to developing markets by creating a $300m separate account with Siguler Guff.

The New Jersey Division of Investment has committed $300 million to a separate account with Siguler Guff that will focus on developing markets, according to documents from the pension’s Thursday board meeting. 

The New Jersey Developing Markets Private Equity Program is a customised account that will invest up to 100 percent in primary or secondary funds and up to 50 percent in co-investment opportunities across developing markets outside of Asia, according to the documents. The account’s management fee is 0.5 percent with 10 percent carry. The preferred return is 8 percent. 

New Jersey cited the middle class expansion that is fueling domestic consumption, the growing financial services industry and the professionalisation of family-owned enterprises as reasons for increasing its exposure to developing markets. Prior to forming the separate account, the pension’s exposure to emerging markets private equity stood at $300 million, focused exclusively on Asia. 

A dedicated team of 15 investment professionals from Siguler Guff will manage the account, which will include a 1 percent general partner commitment. New Jersey selected Siguler Guff because of its experience and local expertise, according to the pension. The firm has invested more than $2.1 billion across 100 emerging market funds and co-investments since its founding in 1991.

New Jersey created its first separate account in December 2011 by entering a “strategic relationship” with The Blackstone Group. The relationship allows New Jersey to invest $1.5 billion in tactical opportunistic separate accounts with Blackstone and $300 million in traditional private equity, energy and credit funds. 

In 2012, New Jersey formed a $350 million real estate-focused investment account with TPG Capital.

PricewaterhouseCoopers acted as New Jersey’s auditor for the account. Ropes & Gray provided legal counsel to the pension. New Jersey did not use a placement agent for the account, according to the documents.

The $74.3 billion pension recently lost director Timothy Walsh to real estate fund manager Gaw North America. Walsh became president and chief operating officer of Hong Kong-based Gaw Capital Partners’ North America business after he left New Jersey Division of Investment on 30 August.