New Jersey to commit up to $850 mln in PE this year

  • New Jersey could invest up to $850 mln in PE, VC
  • $71.7 bln pension carves out up to $425 bln to debt-related PE
  • Establishes $150 mln separate account with Crayhill

New Jersey Division of Investment set its private equity allocation pace, with the $71.7 billion state pension system planning to commit $650 million to $850 million to buyout and venture capital funds over calendar 2017.

New Jersey has an 8.25 percent target allocation to PE and venture capital funds. The system held a little more than 9 percent of its assets in the asset class as of Oct. 31, its most recent investment report shows. The portfolio is valued at $6.5 billion.

New Jersey’s PE portfolio includes deep, multibillion-dollar relationships with some of the industry’s most prominent firms, including Blackstone Group and Warburg PincusTPG co-founder Jim Coulter, whose firm manages roughly $2.3 billion of New Jersey fund commitments, spoke to the state’s investment council about investment trends at its recent meeting.

The Division of Investment has moved into less orthodox private equity strategies recently as well. At its January meeting, the State Investment Council elected to move forward with a $150 million separate account with Crayhill Capital Management for credit-related investments.

As much as $100 million will be committed to Crayhill’s Principal Strategies Fund, with the remaining $50 million held in reserve for other investments, according to pension documents. The commitment remains subject to final negotiations of terms.

The commitment to Crayhill will not fall under New Jersey’s buyout and VC allocation. The pension maintains separate allocations for debt-related PE, real assets and real estate, respectively.

In addition to its commitments to buyout and VC funds, New Jersey will commit $375 million to $425 million to debt-related PE funds, its 2017 investment plan shows. The pension will also commit $200 million to $250 million to real assets funds and as much as $100 million to real estate vehicles.

New Jersey held a little less than 1 percent of its assets in debt-related strategies against a 2 percent target, state documents show. Real assets represent a little more than 2.3 percent of New Jersey assets, against a 2.5 percent target.

New Jersey Division of Investment has 5.89 percent of its assets in real estate and a 7.25 percent target to the asset class.

Action Item: Contact New Jersey Division of Investment: