New York City Comptroller Scott Stringer announced plans to invest another $1 billion with Emerging Managers hoping to do business with New York City's five pension funds. This would bring the total amount invested with Emerging Managers to more than $14 billion, $10 billion of which is committed to Minority and Women-Owned Business Enterprises.
The new allocation is subject to the funds' trustees' approval. It would mean emerging managers would have oversight of investments in each major asset class.
In a press release from his office, Comptroller Stringer said New York City's pension funds are constantly on the lookout for the most talented investment managers in the world. "The plan to allocate $1 billion to Emerging Managers is a major investment in diversifying our roster of investment managers and improving the risk-adjusted returns on the pension funds," said Stringer. "Today we are saying that our doors are open to those firms that can demonstrate to us that they have what it takes to grow our pension funds."
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Emerging Managers is a category of investment managers that also includes Minority and Women-Owned Business Enterprises. New York City's first investment with Emerging Managers was made in 1991, in the public equity asset class of one of its five pension funds.
With this latest announcement, Comptroller Stringer will make the first commitments the funds have made to Emerging Managers in the hedge fund, opportunistic fixed income, and real estate asset classes.
The Emerging Managers Program attempts to direct opportunities to those firms that may have been overlooked in initial search processes because they are smaller. Exact definitions vary by asset class. In general, Emerging Managers have under $2 billion of assets under management, or less than a three year track record.
Minority and Women-Owned Business Enterprises are defined as those management firms with at least 50.1 percent ownership by a minority or woman.
Emerging Managers oversee investments of $5.7 billion in Public Equity, $1.5 billion in Fixed Income, and $300 million in REITS. Commitments of $5.2 billion have been made to Private Equity and $271 million to Real Estate.
All Emerging Manager Program investments are reviewed by an independent account manager, who makes recommendations to the Director of Emerging Managers, Chief Investment Officer and the State Comptroller.
The announcements were made this past Friday at the annual Investment and Emerging Manager Conference, hosted by the Comptrollers Office at the United Federation of Teachers. The annual event is open to CEOs, partners and managers of public equities. Minority and Women-Owned Business Enterprises are encouraged to attend each year.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
