Searches and Hires

New Jersey commits $200 million to real assets

New Jersey Division of Investment, which manages investment for the $70.9 billion New Jersey Pension Fund, Trenton, has made a pair of real assets commitments of up to $200 million.

The division announced Wednesday that it would commit up to $100 million to buyout fund Brookfield Capital Partners V, according to a report presented to a meeting of the State Investment Council, which governs investing policies of the division.

"The fund will target real asset and real asset-related businesses with a focus on value-add and contrarian investments with limited competition in which Brookfield Asset Management can capitalize on its experience owning and managing real asset investments," the report said.

"Target sectors include forest products, building products, construction and engineering, packaging and specialty paper, industrials, midstream energy, renewables, and metals and mining," the report said. The division made a previous commitment of $150 million to another Brookfield fund.

The division also announced making a commitment of up to $100 million in Homestead Capital USA Farmland Fund III, which "will acquire and manage a portfolio of diversified U.S. farmland … located throughout the Mountain West, Pacific, Midwest and Delta regions of the United States," the division report said. "The fund will be the first farmland manager in the pension fund's portfolio."

The division also announced that the pension fund posted a net return of -4.16% for the first six months of 2018. The unaudited result trailed the benchmark of -3%.

For all of 2018, the 12-month unaudited net return was -1.95% vs. the benchmark of -1.79%.

The annualized three-year return for the period ended Dec. 31 was 6.47% vs. a benchmark of 7.1%. The annualized five-year return for the period ended Dec. 31 was 5.41% vs. the benchmark of 5.51%. The annualized 10-year return was 8.46% vs. a benchmark of 8.22%. All of the results are unaudited and net of fees.

For the 12 months ended Dec. 31, the top-performing asset categories for net returns were buyouts/venture capital (17.9%), real assets (11.5%) and debt-related private equity (11.1%). The worst-performing categories were emerging markets equity (-15.3%), non-U.S. developed markets equity (-13.8%) and domestic equity (-8.1%).