NY Pension Boosts PE Allocation

Add another pension system to those lining up to put more money into private equity. The New York State Teachers’ Retirement System (NYSTRS) announced recently it will increase its allocation to the asset class. NYSTRS increased its target for alternative investments to 5% of its assets. It also decreased its domestic equity target from 56% to 51%. A spokesman for the pension system told PE Week last week that there is no time frame for the new target to be reached.

Until the July 28 NYSTRS board meeting, the system’s allocation for private equity stood at 2%.

At the same board meeting, NYSTRS approved three more private equity investments:

* The pension system approved an investment of up to $150 million to Credit Suisse First Boston’s CSFB Seasoned Primaries fund. The fund is a special co-investment type fund specifically for NYSTRS. It will act as a fund-of-funds that invests in various private equity funds that are 50% or less funded.

* NYSTRS authorized an investment of up to $100 million in J.P. Morgan’s J.P. Morgan Venture Capital Institutional Investors III. The investment will be allocated on an 80/20 basis to J.P. Morgan Pooled Venture Capital Institutional Investors III and J.P. Morgan Venture Direct Capital Institutional Investors III.

* The board agreed to invest up to $200 million in Lexington Capital Partners VI, a dedicated secondary fund being raised by New York-based secondary firm Lexington Partners. The fund may raise up to $2.5 billion and Lexington hopes to have a final close on the fund by the end of the year.

NYSTRS has also invested in funds managed by Oaktree Capital Management, Madison Dearborn Partners, Thomas H. Lee Co. and Welsh Carson Anderson & Stowe.