AW Investor Scorecard: Alts in high demand amid market woes

There was March madness this month, but just not the kind most sports fans look forward to, with the NCAA canceled games and now even the 2020 Summer Olympics in Tokyo being postponed in response to COVID-19. Over quickly arranged Zoom meetings and conference calls, trustees continued to fulfill their alternative investment aims. All this work is despite the coronavirus realities driving market uncertainty and unfathomable long-term economic impacts that have yet to be fully assessed. In the last month, large institutional investors pumped almost $11 billion into alternative investment strategies spanning private equity co-investments, real assets and hedge funds. There are also a series of upcoming mandates and manager searches being discussed, including a whopping $1.4 billion slated real estate investment plan floated this month by the Oregon Investment Council in Salem. The largest outlay was from the $210 billion New York State Common Retirement Fund that actually moved forward in February with plans to expand its alternative investment portfolio, specifically in private equity, real estate and real asset portfolios totaling $2.8 billion. Most capital went to the pension fund’s $21 billion private equity program with a total of $2 billion being assigned to Neuberger Berman for the NYSCRF NB Co-Investment Fund II. The fund invests opportunistically in co-investments alongside the pension fund’s existing private equity managers. The allocation will be completed in three tranches – two tranches of $750 million and one tranche of $500 million. Overall private equity allocations accounted for over half of the new mandates drawing in $6.5 billion in inflows. The largest mandate in this area was the Neuberger Berman program at the New York State Common Retirement Fund. Real estate and infrastructure strategies (often included in real asset portfolios) had allocations totaling nearly $2 billion. Approximately the same figure went into private debt strategies, including direct lending, as institutional investors seek yield as interest rates continue to hit fresh lows. Hedge fund mandates were fewer and totaled $1.5 billion over the course of the month, with the largest allocation going to Paul Singer’s Elliott Associates at the State of Wisconsin Investment Board. A full run-down of investor activity follows below.

AW Investor Scorecard: Alts in high demand amid market woes

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