New York pension commits $110m to minority-led funds

The New York State Common Retirement Fund has for the first time backed female-founded Asia Alternatives as well as African American-led GenNx360 Capital. The pension estimates a 20% loss since April.

The New York State Common Retirement Fund (CRF), which has lost an estimated fifth of its value since April, has established two new relationships with minority-run firms as part of $210 million in fresh private equity fund commitments.

The $153 billion pension disclosed a $50 million commitment to Hong Kong-based Asia Alternatives Capital Partners II, the firm’s second fund of funds that closed on $1 billion, according to investment committee documents from the California Public Employees’ Retirement System. The Hong Kong firm was established in 2006 by former Hellman & Friedman director Melissa Ma, former Pacific Venture Partners director Laure Wang and Rebecca Xu, former senior Asia investment officer at the International Finance Corporation.

CRF also earmarked up to $60 million for GenNx360 Capital Partners. The African American-led firm was co-founded by Lloyd Trotter, the former vice chairman of General Electric; Arthur Harper, previously president & CEO of GE Equipment Services; and Ronald Blaylock, who previously founded boutique investment bank Blaylock & Co. The mid-market focused firm closed its debut fund in January on more than $500 million.

It was unclear whether CRF’s commitment went towards the debut vehicle or for a new fund. Neither GenNx360 nor the Common Retirement Fund could be reached before press time.

Los Angeles-based Ares Management also received a $100 million commitment for its third “opportunity” fund focusing on mid-market growth companies. In August, CalPERS disclosed a $400 million commitment to the Ares fund, which it said had already garnered $4 billion in commitments and will invest between $100 million and $400 million in refinancing, balance sheet restructuring, growth capital, management buyouts and reorganisation transactions through subordinated debt and common equity.
 
The investments come as CRF’s actual allocation to private equity hit 8.3 percent earlier this month, in excess of the pension’s 8 percent target. CRF director and state comptroller Thomas DiNapoli has been a strong advocate for alternatives, urging regulators to lift the 25 percent cap on the pension’s alternatives allocation.

Last week CRF deputy chief investment officer Nick Smirensky stepped down to head the New York State Health foundation’s $300 million investment portfolio. Smirensky had been responsible for CRF’s $13 billion private equity programme and had worked for CRF since 1993.

The state pension estimates that it has lost 20 percent of its value over the last seven months but asserts that its ability to meet its obligations is not in jeopardy.

Many US pension funds are tightening their investment programmes and reducing relationships amid public equity losses and slowed realisations. In the nine months to the end of September, the average US state pension fund lost 14.8 percent of its total assets, according to financial services firm Northern Trust.

Matt Levin contributed to this report.