NY pension commits $1.7bn to diverse alternative strategies

The $225 billion New York State Common Retirement Fund allocated $1.7 billion across private equity, real estate, opportunistic alternatives and real asset strategies. These March investment commitments follow the approximately $5 billion in alternative investment mandates already awarded by the retirement system in 2020, as previously reported by Alternatives Watch. Private equity saw the greatest amount of activity with three mandates being disclosed. The largest was to one of the pension’s existing managers Vista Equity Partners. A $500 million commitment was made to the firm’s Vista Credit Partners Fund III, which will invest in senior secured loans across enterprise software, data and technology companies. Clearlake Capital Group’s new fund that recently closed with $7 billion received $180 million from the New York pension system, which has invested in the Santa Monica-based firms’ previous funds. Clearlake Capital Partners VI invests in North American companies that are undergoing complex financial, operational or structural change. A smaller $10 million commitment was made to a late-stage venture fund through the Hamilton Lane/NYSCRF Israel Fund.The allocation to Pitango for its Growth II fund follows previous allocations from the large retirement system.Overall, the system’s allocations are growing steadily within private equity, which is now at 10%, up from 9.4% at the end of 2019. The fund’s funded ratio of 96.1% has been one of the strongest in the nation, officials have said. Also, in March, real estate was another active arena for officials. Ares Management secured $345 million for the Ares European Property Enhancement Partners III, which is a closed-end, diversified European commingled real estate fund managed by Ares Management UK, a wholly owned subsidiary of the US firm that has received previous allocations from New York State Common. A direct investment in a $100 million first mortgage loan increase to an existing loan secured by the building and land at 754 Fifth Avenue, New York, NY was completed in the system’s real estate portfolio on March 19. One of the larger allocations for the month was in opportunistic alternatives with a $400 million commitment to Blackstone Tactical Opportunities Fund III – N. The fund is an add-on to Blackstone’s prior investments in Tactical Opportunities I and II and will source and execute on differentiated deal flow with low correlation to public markets. Lastly, a real assets allocation of $150 million was made to the ITE Rail Fund that is managed by ITE Management. The offering is an open-ended railcar leasing fund focused on acquiring, managing and leasing railcars, primarily in North America.

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