NJ pension system invests in data infrastructure, ILS

The $78 billion New Jersey Division of Investment approved two additional alternative investment allocations totaling $250 million at its trustee meeting this month. Officials approved an allocation of up to $150 million in IPI Partners II within its real assets portfolio. The allocation is to IPI Partners latest fund that builds on the firm’s lead as one of the largest private data center owners in the U.S. IPI’s strategy is specifically focused on the high growth data center property sector. The firm has access to demand-driven assets that are difficult to source, according to New Jersey’s Division of Investment. IPI leverages its connections from its own relationships as well as those of its sponsors Iron Point and ICONIQ. New Jersey’s $2.9 billion real assets portfolio could use a performance boost as returns for the 12 months ending September 30 were more than -18%. The second allocation approved in November was within the roughly $700 million opportunistic portfolio for up to a $100 million commitment to Nephila Catastrophe Fund LP. The fund combines investments in catastrophe bonds along with other insurance-linked securities (ILS) with an anticipated allocation of 50/50. According to the investment staffers, the structure provides a number of benefits including exposure to reinsurance beta and reinsurance alpha. The customized nature of the structure allows too for liquidity due to the ability to trade catastrophe bond positions. Separately, officials announced a partial redemption of $50 million from the Winton Futures Fund, a systematic macro hedge fund managed by Winton Capital Management. The proceeds from the redemption will not only take the firm’s mandate to below $100 million but will also reduce the pension fund’s overall allocation to systematic strategies. The investment report detailing the change did not specify where the proceeds would be reinvested.

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