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NY pension launches $500m green initiative

As part of a growing trend among institutional investors, the $155bn New York State Common Retirement Fund will increase commitments to clean tech private equity.

The New York State Common Retirement Fund (CRF) has launched a $500 million (€318 million) initiative that will increase the public pension’s exposure to private equity investments targeting clean tech and renewable energy.

“Clean technology and renewable energy have become increasingly profitable. It’s not just about doing good for the environment; going green is good for the bottom line too,” Thomas DiNapoli, state comptroller and director of the $155 billion retirement system, said in a statement.

Dubbed the “Green Strategic Investment Program”, the initiative will increase the $40 million the retirement system has already invested in green-focussed private equity funds. New York CRF has more than $440 million in commitments to funds where clean tech is at least a partial component of the fund’s overall strategy, according to the statement.

The initiative will also extend to investments outside the private equity asset class, although the statement did not specify which classes will receive expanded allocations.  

In its most recent round of commitments, the pension invested $10 million in Craton Equity Partners I, a Los-Angeles based fund focussed on investments in water remediation, clean energy, waste conversion and green building materials.

New York CRF is just one of several major institutional LPs seeking to increase their allocation to green investments. Clean teach offers many investors the opportunity to make a socially conscious investment choice while still garnering high returns. Venture heavyweight Kleiner Perkins and Deutsche Bank’s private equity division have both recently launched funds exclusively devoted to environmentally friendly investments.

Last year, New York CRF’s 6.5 percent allocation to private equity yielded a 28.7 percent return.