NYS Common goes the sustainable route with $300m alts investment

The New York State Common Retirement Fund has announced $800 million in recent investments through its Sustainable Investments and Climate Solutions program that includes a $300 million mandate to Avenue Capital.

At the end of January, the $211 billion pension system committed the capital to the Avenue Capital Sustainable Solutions Fund, which will focus on small and mid-cap companies in sustainable sectors including renewable energy, recycling and waste management. The Avenue Capital commitment is in New York’s opportunistic portfolio.

The Avenue Capital Sustainable Solutions fund is a private credit vehicle created to participate in sustainable/impact themed investment opportunities. It will focus on North American non-sponsored small and mid-cap companies within such sectors as Agriculture & Water, Waste-to-Value & Recycling, Smart Cities & Land Use, and Distributed Renewables.
Avenue Capital is an existing relationship for NYS Common.

“Climate change is one of the greatest risks facing investors, but worldwide effort to address it has spurred innovation and change and take advantage of the opportunities created by the global transition to a lower carbon sustainable economy to strengthen the fund,” said New York State Comptroller Thomas P. DiNapoli today.

This is part of his climate action plan, whereby he has committed $20 billion to sustainable investments. To date, the pension fund has allocated $8.5 billion of that overall amount, including to the Nuveen Core Impact Bond Strategy and the Calvert Social investment Fund, both traditional fixed income strategies.

Other alternative investment allocations made last month were through the emerging manager program.

The Fox RV Parking Fund I received a $15 million commitment that was made by the Empire GCM RE Anchor Fund that is managed by GCM Grosvenor as part of the real estate asset class. The fund is a real estate equity joint venture with The Macritchie Group. The venture is slated to invest in niche storage strategies with a focus on developing and acquiring oversized vehicle storage facilities.

The second allocation to an emerging manager was a $20 million investment in the Pennybacker Credit II fund, which was also part of GCM Grosvenor’s Empire GCM RE Anchor Fund. Pennybacker is a real estate joint venture sponsored by Pennybacker Capital and will make investments in mezzanine debt and preferred equity investments secured by commercial real estate. It’s the first time that NYS Common has invested with Pennybacker.