NY Common's PE programme rallies

The US’ third largest public pension generated overall returns of 25.9% in its most recent fiscal year – thanks in part to its private equity valuations being back in the black.

The New York State Common Retirement Fund’s private equity portfolio returned 11.6 percent for the 12 months ended in March – a significant increase from the -22.2 percent reported for the previous 12-month period.

The $130 billion public pension generated overall returns of almost 25 percent for its entire portfolio in the 12 months to the end of March.

We’re moving in the right direction.

Thomas DiNapol

New York State Comptroller Thomas DiNapoli said in a statement the pension had come through “one of the toughest recessions in modern times” and was benefiting “from the national economic recovery we hope is taking hold”.

However, he added: “We’re not all the way back yet, and as we’ve seen in recent weeks, there are still challenges in the marketplace. But our foundation is strong. We’re moving in the right direction.”

While private equity wasn't its top performer – absolute return strategies returned 14.9 percent, and both domestic and international public equities returned nearly 52 percent – its performance contrasts starkly with the pension's real estate investments, which reported a -27.8 percent return.

In December, the pension committed a total of $40 million to private equity small cap funds managed by DeltaPoint Capital and Clearlake Capital Partners, the latter commitment being part of an emerging manager programme targeting first or second funds with assets under management below $750 million, as well as funds owned by women or minorities. 

New York Common committed $25 million to DeltaPoint Capital’s fourth fund, which is targeting between $100 million and $125 million, and $15 million in Clearlake Capital Partners II, a distressed and special situations fund. Clearlake is targeting $500 million for its second fund, and has collected at least $200 million.