New York City Retirement Systems plans to nearly double its internal investment staff by hiring 40 additional people over the next 18 months to oversee the system's allocations to private equity, real estate and possibly hedge funds. The city also recently hired Townsend Group as its first real estate consultant to help in selecting real estate investments.
Adam Blumenthal, the city's first deputy comptroller/CFO who also helps oversee the city's $88 billion system, said most of the new staffers will focus on hiring and monitoring alternative investment money managers, as well as contract negotiations. The city's bureau of asset management currently employs about 50 investment and compliance officers. He added that some of the new employees will also focus on compliance issues and risk management. The city will conduct the searches on its own, and the effort will be overseen by CIO Deborah Gallegos.
In late 2003, each of the city's plans allocated 5% of assets to real estate and 5% to private equity, but to date neither allocation has been filled, said Mr. Blumenthal. The five plans are: the $41 billion New York City Employees' Retirement System, the $23 billion Teachers' Retirement System, the $14 billion Police Pension Fund, the $5 billion Fire Department Pension Fund and the $5 billion Board of Education Retirement System.
Mr. Blumenthal said a recent audit conducted by Independent Fiduciary Services suggested that additional personnel were needed.
"The existing staff at here is quite capable and qualified," said Mr. Blumenthal. "We have very strong professionals at the bureau of asset management who supported the investments of the pension systems." Mr. Blumenthal also added that he is not worried about competing with the private sector for new talent, even though the private sector traditionally offers much higher salaries for investment expertise. "We know we can attract them because they've been here a long time," he said.
