The $70 billion New Jersey State Investment Council is considering raising its upper limit to private equity exposure to 12 percent from its current cap of 7 percent. The state’s actual private equity allocation stood at 6.5 percent as of August 31.
The State Investment Council is considering a change in the rules that would allow the head of the investments division to expand its investment in alternatives, which includes private equity, real estate, hedge funds and real assets, to 38 percent, a spokesperson said. The current maximum for alternatives is 28 percent. The state’s consultant, Strategic Investment Solutions, suggested the increase, stating in a September letter that New Jersey’s allocation to alternatives is “below the average of peer plans in total alternatives exposure, in particular with respect to private equity…” The 20 largest state pension funds have an average target to private equity of 10.8 percent. New Jersey’s target allocation is 5.5 percent.
The state will likely pledge $700 million to $1 billion to private equity over the next 12 to 15 months, Christine Pastore, New Jersey’s head of private equity, said at a conference in April. New Jersey has not made a commitment to the asset class since November 2008.
In other news, Timothy Walsh became the new director of the Treasury’s Division of Investment in July, replacing William Clark, who left to become the senior vice president and CIO at the Federal Reserve System’s Office of Employee Benefits. Walsh most recently served as the CIO of the $8.5 billion Indiana State Teachers Retirement Fund.