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New Jersey slates $150 million for 2 managers, tweaks asset allocation

The New Jersey Division of Investment, which manages investments for the $73.6 billion New Jersey Pension Fund, Trenton, approved two commitments totaling up to $150 million.

It committed up to $100 million to Onex Partners V, managed by Onex Corp., which focuses on control investments in companies in the U.S., Canada and Europe, according to a division report delivered Wednesday at a meeting of the New Jersey State Investment Council. The council develops investment policies for the division. The division has made prior commitments to Onex funds dating back to 2006.

The division also made a commitment of up to $50 million to Hammes Partners III, which focuses on buying and developing medical office buildings and ambulatory care centers.

The state investment council also voted to make several changes to the pension fund’s asset allocation for the fiscal year beginning July 1, confirmed Willem Rijksen, a spokesman for the Treasury Department. The council raised the U.S equity target to 29% from 28% and cut the equity-oriented hedge fund target to 1% from 2%. It also raised the investment-grade credit target to 9.5% from 9% and reduced the credit-oriented hedge fund target to 1.5% from 2%. The additions to U.S. equity and investment-grade credit will come from hedge fund redemptions as the council continues reducing the pension fund’s allocation to hedge funds. In August, the council voted to drop the overall hedge fund allocation to 6% of total fund assets by Dec. 31, 2018, from 12.5% in the fiscal year ended June 30, 2016.

“Redemptions for the hedge fund program remain on track to meet the allocation target of 6% by calendar year end 2018,” the division of investment report said. As of March 31, the aggregate hedge fund allocation was approximately 8.5% of total plan assets Separately, the pension fund returned 11.92% for the 12 months ended April 30, surpassing the benchmark of 11.62%, the division report said. The annualized return for the three years ended April 30 was 5.76% vs. the benchmark of 5.53%. The division of investment also announced that Karen Paardecamp, head of international equities, would retire on June 1. She is responsible for developed markets and emerging markets, which represent $13.2 billion, or 17.9%, of total pension fund assets as of April 30.

“The division is now reassessing its staffing needs,” the division’s report said. “In the interim, responsibilities have been allocated between two investment professionals with prior experience working on the international equity team.” Further information was not provided.