NYSTRS begins 4th year with TorreyCove

The New York pension fund, which has almost 8% of its assets in private equity, renewed its contract with TorreyCove Capital Partners as its private equity consultant, effective 1 May.

The New York State Teachers’ Retirement System’s (NYSTRS) fourth year with its private equity consultant TorreyCove Capital Partners began Monday.

The retirement board of NYSTRS authorised Thomas Lee, the pension system’s executive director and chief investment officer, to renew its annual contract with TorreyCove for the third time at its January board meeting, according to meeting materials for its 26 April board meeting.

The new contract begins 1 May for one full year with a maximum fee of $800,000, the materials showed.

NYSTRS, which had 7.6 percent of its total assets in private equity as of 30 June, initially hired San Diego-based TorreyCove in 2014 to advise on its private equity investments, according to media reports at the time. TorreyCove had replaced New York-based StepStone Group, which had been NYSTRS’ private equity advisor since 2008, reports said.

TorreyCove’s consulting services include fund due diligence, general research, accompanying NYSTRS staff on due diligence visits, providing analyses for purposes including portfolio risk monitoring and negotiating investment agreements on NYSTRS’ behalf, according to the April meeting materials.

NYSTRS’ private equity portfolio has 220 active fund investments with 91 fund managers, as of 31 March, the meeting materials said.

The $108 billion pension fund has committed to three private equity funds so far in 2017, including $200 million to large-cap tech-focused fund Silver Lake Partners V, $75 million to mid-market fund One Rock Capital Partners II and $75 million to growth-oriented Valor Equity Partners IV.

For the year ended 31 December, NYSTRS’ private equity portfolio returned 11.8 percent, underperforming against the S&P 500 benchmark, which generated a 17 percent return, the materials showed. It was not clear whether the returns were net or gross of fees.