The governing board of the New York State Teachers’ Retirement System, Albany, has approved the creation of an internally managed passive international equities strategy that could be as big as $1 billion.
The board authorized Thomas Lee, executive director and CIO, to begin work on this investment which will be funded incrementally between 2024 and 2028 “in multiple stages,” said the board resolution authorizing the investment strategy.
“Internal management would reduce manager concentration, provide NYSTRS with operational benefits, and further enhance staff’s expertise and capabilities,” said a staff report describing the strategy.
“International markets are complex,” said the report, noting that the pension system’s benchmark for international equities contains more than 2,000 stocks in 46 countries.
“Therefore, to mitigate risk, staff is proposing a multiyear implementation timeline, starting with approximately $170 million of externally managed passive Canadian and U.K. securities, before progressing to other countries and regions,” the report said.
Also at the meeting, the board approved one-year renewals for three consultants as well as one-year renewals for nine investment managers. The consultants are: StepStone Group, effective Feb. 1, for a combined $16.7 billion in private equity and private debt; StepStone Group, Feb. 1, for $17.7 billion in real estate equity and debt; Meketa Investment Group as the secondary real estate consultant, effective Feb. 1, for $5.7 billion in real estate investment trusts and commercial mortgage-backed securities.
The asset manager renewals are:
- State Street Global Advisors for $7.07 billion as a passive ACWI ex-U.S. international equity manager, effective Feb. 18, 2025.
- BlackRock for $6.76 billion as a passive ACWI ex-U.S. international equity manager, effective Dec. 12.
- Harding Loevner Management for $1.7 billion as an active global equity manager benchmarked to the MSCI ACWI index, effective Feb. 27, 2025.
- AQR Capital Management for $1.29 billion as an active MSCI ACWI Ex-U.S. international equity manager, effective Jan. 6, 2025.
- Loomis Sayles & Co. for $1.19 billion as an active global bond manager benchmarked to the Bloomberg Global Aggregate Float Adjusted ex-CNY Bond Index Hedged to U.S. dollar, effective Nov. 8.
- Goldman Sachs Asset Management for $726.6 million as an active global bond manager benchmarked to the Bloomberg Global Aggregate Float Adjusted ex-CNY Bond Index hedged to the U.S. dollar, effective Nov. 12.
- Marathon Asset Management for $624 million as an active EAFE international equity manager, effective Jan. 24, 2025.
- Nomura Corporate Research & Asset Management for $605.6 million as an active U.S. high yield manager in an account benchmarked to the ICE BofAML U.S. High Yield Constrained Index, effective Nov. 28.
- Dimensional Fund Advisors for $258.2 million, as an active emerging markets manager benchmarked to the MSCI Emerging Markets Index, effective Feb. 19, 2025.
Separately, the board reported two commitments, approved Lee, that did not require a board vote, a pension system spokeswoman confirmed.
The first commitment was to Linden Capital VI for $200 million, managed by Linden Capital Partners, focusing on healthcare investments primarily in North America. Linden is an existing relationship.
The second was OIC Structured Equity Fund for $150 million, managed by Orion Infrastructure Capital, which focuses on energy transition and energy infrastructure investments primarily in North America. Orion is also an existing relationship.
