Mr. Walsh has been director of the division, which manages investments for the $74.3 billion New Jersey Pension Fund and the state's $12 billion short-term cash management pool, since April 2010.
Mr. Walsh's departure was announced Friday by Andrew Sidamon-Eristoff, New Jersey state treasurer.
Christopher McDonough, the division's deputy director, has been named acting director until a search committee of State Investment Council members, led by Chairman Robert Grady, finds a permanent replacement, confirmed William Quinn, a treasury spokesman.
Mr. McDonough joined the New Jersey investment office in January 2011. He had been chief investment officer of the $4.6 billion Philadelphia Board of Pensions and Retirement.
Mr. Walsh previously served as chief investment officer of the Indiana State Teachers' Retirement Fund, which now is part of the $28.3 billion Indiana Public Retirement System, Indianapolis.
Mr. Walsh said he will join GAW Capital North America as president and chief operating officer, based in Chicago. GAW Capital Partners also has offices in Hong Kong, Seoul and Shanghai.
“Most (P&I) readers will know GAW Capital Partners from their China real estate funds, but I'll be concentrating on U.S. real estate” investments, Mr. Walsh said in an e-mailed reply to a request for comment.