Your editorial support for restructuring New Jersey's pension portfolio (Pensions & Investments, Nov.10) is welcome. New Jersey's peculiar historical characteristics — the absence of alternative asset classes, external managers, indexing, conventional risk controls and transparency — created a confection which turns modern portfolio theory on its head. Reform requires the engagement of diverse constituencies in a collaborative and time-consuming process. But some of us believe higher returns and reduced portfolio risk necessitate significant allocations to alternative asset classes and private managers.
There is a perception in some quarters, reflected in your editorial, that New Jersey law prohibits the use of outside managers. My personal view is that careful scrutiny of the law might indicate otherwise.
Orin S. Kramer
New Jersey Investment Council