New York City Teachers' Retirement System will invest $1 billion in improvement projects and repairs of damage caused by Superstorm Sandy.
“This innovative plan could help us rebuild the city, create jobs and yield solid returns on our pension funds,” New York City Comptroller John Liu said Thursday. “Together we can produce great projects that are also sound investments.”
The city teachers' pension fund is the largest of the five city pension funds, with assets of $44.98 billion. Mr. Liu serves as the investment adviser, custodian and trustee to the five pension funds, with total assets of $124.8 billion.
The announcement was made at a news conference in New York on Thursday that had several speakers, including Mr. Liu and former President Bill Clinton who, in prepared remarks, called the pledge “a remarkable commitment” that would help “putting us on the path to a sustainable future for New York City.”
The commitment will include improvements to transportation, housing, power, water and communications, all of which were affected by the storm that hit the New York metropolitan area Oct. 29-30, according to a news release issued by Mr. Liu's office.
“While all projects will be rated on the basis of their return and the fund's fiduciary standards, potential investments could range from repairing bridges to rebuilding housing destroyed by the hurricane,” the news release said.
The pension fund's investments “could take the form of bonds purchased by the fund from owners of the projects, or in partial ownership of the projects themselves,” the news release said. ”Recommendations about actual projects or the form of investment in them will be made by investment professionals on the comptroller's staff to the trustees of the (teachers' pension fund), who will make the final decision.”
For about 20 years, the various New York City pension plans have, in aggregate, invested about 2% assets annually through the city's Economically Targeted Investment program. These investments are primarily for housing in low- and middle-income neighborhoods.
“The ETI program seeks investment opportunities that are not only expected to deliver risk-adjusted market rates of return for (the city's pension system), but also to generate collateral benefits to the city,” according to the comptroller's website. “ETIs are designed to address market inefficiencies by providing capital or liquidity to underserved communities and populations citywide.”