New York fund joins green LP parade

New York’s retirement fund is the latest LP to join the growing ranks of state pension asset managers with dedicated cleantech investment programs.

State Comptroller Thomas DiNapoli announced last week that the New York State Common Retirement Fund will commit $500 million to “green” investments over the next three years. The Green Strategic Investment Program will consider investments in all asset classes, including hedge funds and real estate as well as cleantech-focused private equity funds, which are likely to attract a large share of funding.

“You could argue that since private equity is where we’ve had our [cleantech] exposure in the past, it has a leg up,” says Jim Fuchs, spokesman for the state retirement fund, which has more than $153 billion under management, according to its last annual report.

The state pension fund currently has $40 million invested in private equity funds focused on cleantech and renewable energies, and another $440 million in funds, principally managed by Carlyle/Riverstone Holdings, that include those industries in their investment strategies.

The New York initiative is one of several similar efforts launched by state pension managers in the last few years.

California’s two big state pension funds run the largest and most active cleantech investment program nationwide. Under the 2004 California Green Wave Initiative, the state treasurer urged the two state pension funds, California Public Employees’ Retirement System and California Teachers’ Retirement System, to invest a combined $500 million in private equity investments, venture capital and project financing to develop clean technologies.

CalPERS announced last year that it would commit $400 million to a new private equity vehicle focusing on cleantech investments managed by Pacific Corporate Group. The fund reported that it committed $200 million through its Alternative Investment Management Program’s environmental technology program.

Pennsylvania was also an early entrant to the cleantech sector. The state launched the Keystone Green Fund in 2006, allocating $40 million to private equity, venture capital and project financing in cleantech. The program allocated another $50 million to managers with strong cleantech investing records.

The Connecticut Retirement Plans and Trust Funds has also taken steps recently to step up its investments in environmental technologies.

The Constitution State is currently investing in a cleantech fund of funds program. Connecticut Treasurer Denise Nappier said last year that the state is also working on a fixed income opportunity relating to renewable energy debt instruments, looking at making its real estate portfolio more energy efficient and owns stock in companies that focus on cleantech.

State treasurers and pension fund leaders are also working on climate change issues through Investor Network on Climate Risk (INCR), a program established by environmentally conscious investors’ group Ceres.

Officials from California, Connecticut, Florida, Illinois, Maryland, Massachusetts, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island and Vermont have signed the INCR Action Plan.

The plan calls for boosting investments in energy efficiency and clean energy technologies and for requiring tougher scrutiny of carbon-intensive investments.