NYC considers purchasing secondary interests

The $124bn retirement system would likely focus on individual interests in existing relationships, says head of private equity Barry Miller.

Just months after completing the sale of almost $1 billion in private equity interests, New York City may be entering the secondary market as a buyer.

“We’ve looked at being a buyer on the secondary market as well,” said Barry Miller, head of private equity in the office of city Comptroller John Liu, while speaking at a Dow Jones event Thursday. “Where we can be competitive is if someone wants to sell a $200 million to $300 million part of an individual fund … and we’re comfortable in doing that.”

Miller added that the city’s five retirement systems would not be competing with specialist secondary firms to acquire entire portfolios. Instead, the $124 billion system would likely focus its efforts on individual fund interests.

If the retirement system does engage the secondary market as a buyer, it will not be to take on new fund managers, Miller told Private Equity International afterward. Instead, New York City would likely acquire interests in vehicles managed by firms with which it already has a relationship.

New York City sold approximately $520 million in private equity commitments in March, which was followed by an additional $456 million in July. The UBS-run sale included interests in vehicles managed by Clayton Dubilier & Rice, Silver Lake, Thomas H Lee Partners, AEA Investors, Ethos Private Equity, HM Equity Management, NewSpring Ventures, Tailwind Capital and Vitruvian Partners, Miller told Private Equity International in a previous interview.

Prior to the sale, the city’s system had 172 funds run by 108 general partners, representing roughly $13.7 billion in commitments. After the sale, the system had 161 funds with 99 general partners, representing roughly $12.7 billion in commitments.

As of 31 March, New York City had $8.4 billion in private equity assets under management, good for 6.8 percent of its total assets.