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The New York State Common Retirement Fund delivered a solid return of 6.19% in the third quarter of fiscal year 2023/24, increasing its asset value to $259.9 billion as of December 31, 2023.
The pension giant, whose fiscal year runs from April 1 to March 31, reported investment commitments of more than $830 million during December 2023 and also raised capital from another public equity fund. ing.
The quarterly performance alone exceeded the fund’s expected annual long-term return of 5.9%, following a 1.59% investment loss in the previous quarter and a 3.08% gain in the first quarter of the fiscal year.
“While the market has improved compared to past quarters, some volatility remains,” New York State Comptroller Thomas DiNapoli said in a release. “Opinions on the economy are mixed and uncertainty remains for the year ahead. Nevertheless, thanks to our prudent management and long-term strategy, pensioners and members are confident that their pension benefits will be You can continue to have confidence that you are safe.”
At the end of 2023, NYSCRF’s asset allocation was 41.84% in listed equities (down from 44.14% nine months ago). Cash, bonds, and mortgages at 22.62% (up from 21.53%). Private equity 14.75% (up from 14.61%). 13.30% Real estate and real assets. 7.49% credit, absolute return strategies, and opportunistic alternatives (up from 6.33%).
During December, the pension fund exited Wellington Management’s Asia Old Japan Contrarian Fund. The $243 million that the pension had invested in the International Equity Fund was allocated to cash, and the termination increased the NYSCRF’s total cash out of public equity in calendar 2023 to more than $4.6 billion.
In addition to exiting the public equity fund, the pension fund committed to investing about $830 million in December, more than half of which was allocated to two funds within its real assets portfolio. The pension fund contributed his $275 million to his DigitalBridge Partners III fund at DigitalBridge Group. This marks a new relationship with NYSCRF. This closed-end fund seeks to acquire digital infrastructure assets including macro cell towers, data centers, fiber, small cell networks, edge infrastructure and other related businesses.
We also committed $200 million to The Carlyle Group’s Carlyle Renewable and Sustainable Energy Fund II. The fund is a closed-end fund focused on middle market transactions targeting traditional renewable energies such as wind and solar, as well as new energy transition strategies such as industrial applications and electricity. vehicle infrastructure.
Within its private equity portfolio, the pension fund plans to invest $175 million in Altaris’ Health Partners VI fund, which will focus primarily on healthcare investments in North America. Altaris is also a new relationship for pension funds.
The pension fund will also commit $100 million to Insight Venture Management’s Empire Co-Invest II fund, which will invest in co-investment opportunities alongside the Insight Partners XIII fund.
An additional $20 million will be allocated to Contour Venture Partners within the private equity portfolio, which will seek seed-stage investments in the B2B, SaaS, enterprise SaaS, financial services technology, and digital health spaces primarily in New York City. .
Within its real estate portfolio, the pension fund has secured more than $62 million for the forward purchase of a 175-unit single-family rental development in Poinciana, Florida.
The pension fund also announced it would sell corporate bonds and actively managed public stock holdings after determining that eight oil and gas companies, including Exxon Mobile, are not ready for the transition to a low-carbon economy. The other companies are Guanghui Energy, Echo Energy, IOG, Oil and Natural Gas Corporation, Delek Group, Dana Gas, and Unit Corp.
As of the end of 2023, the pension funds’ holdings in the eight companies were worth approximately $26.8 million.
“Climate change has become an urgent risk facing all investors, and I am determined to protect our state’s pension funds by being at the forefront of efforts to reduce risk to our investments,” DiNapoli said in a statement. “There is,” he said. “This reduces our endowment’s exposure to fossil fuels.”
Related article:
New York State Pension Continues to Reduce Equity Exposure
New York state pension cashes out of $2.1 billion public equity fund
New York state pensions lose $26 billion in asset value in first quarter
Tags: investment commitments, investment returns, New York State Common Retirement Fund, New York State Comptroller’s Office, pension funds, public equity, termination, Thomas DiNapoli
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