The governing board of the $137.9 billion New York State Teachers' Retirement System, Albany, on Friday voted to allocate up to $1 billion for an internally managed passive equity strategy benchmarked to the S&P MidCap 400 index.
The board's unanimous vote characterized the amount as an "initial allocation," and the board directed Thomas K. Lee, the executive director and CIO, to establish the fund.
The board didn't describe the structure of the new fund.
The money for the new fund will come from "rebalancing portfolios as needed," spokeswoman Heidi Brennan wrote in an email.
The board acted "to better manage our exposures across our portfolio relative to our policy benchmark," which is the S&P 1500 index, she wrote.