New Jersey might be best known for its shoreline, boardwalks and Atlantic City casinos, but it is also home to one of the more successful public pension funds in the country. The New Jersey Division of Investment’s private equity portfolio collected just under $2 billion in about 12 months, according to it most recent performance report.
Its second partnership with Neuberger Berman, NB/NJ Custom Investment Fund II, returned the biggest chunk of its $2 billion jackpot. From November 2014 to November 2015, the co-investment fund raked in $110.5 million. The vehicle also had the highest investment multiple of all the funds in both top five lists.
It was followed by another co-investment vehicle, SONJ Private Opportunities Fund II LP, which is managed by BlackRock. That pool returned $90.9 million. In third place was the Blackstone Group’s Tactical Opportunities Fund, which distributed $83.4 million. The TacOpp fund is a mix of large separate accounts for big investors and a commingled vehicle for smaller LPs.
Remarkably, four funds recorded a distribution percentage (distributions as a percent of contributed capital) of 100 percent. Fourth-generation funds all topped the list. Leading the way, in terms of the amount distributed, was Silver Lake Partners, whose fourth flagship returned $17.3 million with its first round of distributions. KPS Capital Partners, a specialist in the distressed debt space, came in second with $8.2 million. Another firm adept in the turnaround market, MHR Fund Management, came in third, with its Fund IV distributing $1.5 million.
Each of the top five lists are well diversified, as no firm appeared on both.
All told, New Jersey’s PE portfolio has a combined investment multiple of 1.4. The pension had just under $13 billion in committed capital across 107 active funds as of November 30, 2015. Those active investments have a combined $10.7 billion drawn down and have produced $13.5 billion in realized returns.
Download the LP Scorecard table as a spreadsheet: New Jersey Division of Investment LP Scorecard Table