New York State Teachers picks global equity firm, makes follow-on commitment

The governing board of the $111.1 billion New York State Teachers' Retirement System, Albany, approved a new global equity hire and a follow-on commitment for private equity and private debt, and it has terminated the manager of an international equity portfolio.

All actions took place at the board's quarterly meeting Jan. 31.

The board authorized allocating up to $1 billion in one or more tranches to Arrowstreet Capital to manage a portion of the pension system's global equity assets — U.S., emerging markets and developed international markets — benchmarked to the MSCI All-Country World index, for one year, "pending the satisfactory completion of due diligence," according to a notice posted on the system's website.

Arrowstreet also manages $548 million in a non-U.S. equity strategy for the pension system.

The board also authorized committing an additional $400 million to The Maple Fund LP, a separate account managed by HarbourVest Partners in an effort to increase the pension fund's "exposure to co-investment opportunities with certain of the system's private equity and private debt managers," said the website. The pension system committed $600 million in October 2017.

This fund allows the pension system "to take advantage of favorable conditions to increase exposure to a subset of high-performing managers with whom the system has an existing relationship," Mr. Cardillo wrote.

The board also authorized Thomas Lee, the executive director and chief investment officer, to terminate the pension systems contract with Aberdeen Standard Investments, formerly Aberdeen Asset Management. Aberdeen had been managing $533 million in an international equity mandate.

"Based on our ongoing review of investment strategies and our stable of managers, we are reallocating those assets to other existing strategies across our total portfolio," system spokesman John Cardillo wrote in an email.

The board approved a one-year extension for TorreyCove Capital Partners as the system's private equity consultant, effective May 1. It also approved an extension for KPMG to perform audit and ancillary services, including an examination of the pension system's financial statements for the fiscal years ending June 30, 2019 and June 30, 2020.

These are the last renewals allowed under the firm's contracts, so the pension system expects to issue RFPs for a private equity consultant and for an auditor in late 2019 or early 2020, Mr. Cardillo wrote.

Board members also re-elected David P. Keefe as president and Michael J. Masse as vice president, each for a one-year term.