ALBANY, N.Y. - The New York State Teachers' Retirement System authorized up to $450 million in new private equity investments: up to $200 million to Horsley Bridge Fund VII; up to $50 million to VantagePoint New York Venture Partners; and up to $200 million to J.P. Morgan Venture Capital Institutional Investors II. Funding comes from reducing the $80 billion system's domestic equity portfolio. The board decided at its July meeting to cut U.S. equities and move the money into alternatives.
The plan terminated Brinson Partners and Baring Asset Management as international equities managers. Brinson, which managed $1 billion, was terminated for performance and organizational changes, said John Cardillo, system spokesman. Baring, which managed $346.5 million, was terminated for performance and personnel changes, Mr. Cardillo said. Greg Fedorinchik, Brinson spokesman, said the contract expired and the Brinson portfolio of active market allocation with passive security selection no longer fit the system's mandate. He added that Brinson still runs a diversified $275 million real estate portfolio for the system. Baring spokeswoman Gina Solomon said: "We typically don't comment on the activities of our clients."
Also, the system hired Lend Lease Real Estate to manage up to $100 million in an apartment investment program; and it allocated up to $75 million in Westbrook Real Estate Fund IV, and up to $110 million to Cabot Advisors, which was reinstated for the industrial investment program. It also renewed its contract with Callan Associates to monitor its external mangers for one year.
It placed Iridian Asset Management, which manages $509.86 million in active domestic large-cap value equities, on a watchlist for performance. Montag & Caldwell, which manages $497.26 million in active domestic large-cap growth equities, also was placed on a watchlist for performance and because the manager was sold as part of ABN AMRO's purchase of Montag & Caldwell's parent Alleghany.
The system also renewed its contract with Dresdner RCM Global Investors, which manages $299.47 million in active domestic small-cap equities. It also renewed Peregrine Capital Management's $467.14 million active domestic small-cap growth equity portfolio; and renewed Deutsche Asset Management's $1.25 billion passive international equity portfolio.