New Jersey Division of Investment, Trenton, cannot legally hire external investment managers to handle assets for the $62 billion State Investment Council, according to the state's non-partisan Office of Legislative Services. Based on state law as well as two opinions by the state attorney general, "we believe the State Investment Council does not possess the power to delegate management discretion and investment decisions to a private outside entity," OLS Executive Director Albert Porroni wrote to Republican state Sen. Peter A. Inverso, who asked for the review.
Last month, a report by Independent Fiduciary Services recommended the state turn over some investment management to external firms for diversification. Tom Vincz, spokesman for state Treasurer John McCormac, said, "We have said all along in reviewing all recommendations from the IFS report that if there is need for legislation to implement any of the recommendations, we will seek it."
Separately, the department is reviewing responses to its RFP for a full-service investment consultant and hopes to make a selection within the next 45 days.