The New York City Retirement Systems will seek one or more investment managers to invest on the pension system's behalf with emerging managers, including those emerging firms managed by women and minorities, for its alternative asset classes, New York City Comptroller Scott Stringer said.
Mr. Stringer, the fiduciary for the five pension funds within the New York City system, said the asset classes are private equity, real estate, infrastructure, hedge funds and alternative credit, according to a news release Friday.
"We are constantly building on our emerging manager programs not just because it's the right thing to do," Mr. Stringer said in the news release."It has delivered strong results for our beneficiaries."
The $195.8 billion pension system will look for "best-in-class first time funds and early stage investment firms," the news release said.
The talent search, described as a partnership between the firms and the pension system,will be conducted by the bureau of asset management, the unit in the comptroller's office that assesses investments for the pension system. The individual boards of trustees of the five pension funds have final say on what manager each one hires.
"Ensuring our access to the best investment talent available is part of our fiduciary duty," Mr. Stringer said. "That requires searching for talent in less conventional places, and making sure that industry roadblocks don't keep our managers from hiring the best."
Mr. Stringer set a goal for emerging managers to account for 10% of all asset classes in the pension system, although he didn't cite a timetable. Approximately 6.5% of assets under management across all asset classes are now allocated with emerging managers.
The total amount allocated to alternative asset classes — private equity, real estate, infrastructure, hedge funds, and alternative credit — is approximately $43 billion. The percentage managed by emerging managers was not available.
In addition, Mr. Stringer plans to ask the boards of trustees to approve a $500 million allocation for direct private equity investments for emerging managers. In 2015, the pension system allocated $500 million to this strategy which has been fully committed.