NEW YORK, NY—New York City Comptroller Scott M. Stringer plans to invest $1 billion with Emerging Managers interested in doing business with New York City’s five pension funds, which would bring the total amount invested with Emerging Managers to more than $14 billion, including nearly $10 billion committed to Minority and Women-Owned Businesses Enterprises (M/WBEs). With this allocation, and subject to Trustees’ approval, the pension funds would have Emerging Manager investments in each of its major asset classes.
“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 of the pension funds,” Comptroller Stringer said. “The Funds are constantly on the lookout for the most talented investment managers in the world. 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.”
The New York City Pension Funds are dedicated to creating opportunities for Emerging Managers, a category of managers that also includes M/WBEs. The Funds’ inaugural Emerging Manager investment was made in 1991 in the public equities asset class. The proposed commitment announced today, which will be subject to appropriate due diligence, will be the inaugural Emerging Manager commitment in the hedge fund and opportunistic fixed income asset classes and will also encompass an additional commitment in the real estate asset class.
Emerging Managers are defined as those firms that are smaller, or may have been overlooked by traditional search processes. Though the exact definitions vary by asset class, in general, Emerging Managers have under $2 billion of assets under management or less than a 3-year track record. M/WBE firms are defined as those with at least 50.1 percent ownership by a minority or woman.
As of December 31st, the New York City Pension Funds have Emerging Manager investments of $5.7 billion in Public Equity, $1.5 billion in Fixed Income, $300 million in REITS and commitments of $5.2 billion in Private Equity and $271 million in Real Estate.
The theme of this year’s annual investment conference is “Expanding Opportunities,” as the goal of the conference is to discuss and outline for existing and prospective asset managers, professional and financial service providers, trade associations and all attendees both the new and existing opportunities available to conduct business with the City’s pension funds.