The New Jersey Department of Treasury’s Division of Investment (DOI) launched a new Emerging Managers initiative to further diversify the private markets portfolio for the state’s nearly $95 billion pension fund.
“I applaud Treasury and the Division of Investment for putting the wheels in motion and casting a wider net to attract a broader range of diverse investment opportunities, including investment managers from underserved communities,” said Gov. Phil Murphy. “We are essentially putting together a farm team to build up the next generation of talent – emerging managers who have the skills, but not necessarily the access to make to the major leagues.”
The initiative was presented April 27 during the latest State Investment Council meeting. The DOI also proposed its first investment in the new program — up to $250 million in a separately managed investment vehicle by Barings Funds & Co-Investments.
“The platform will enhance the pension fund’s exposure to a broader range of fund managers, including diverse fund managers,” said State Treasurer Elizabeth Maher Muoio. “The Division of Investment has a fiduciary duty to invest pension fund assets for the financial benefit of the fund’s beneficiaries – New Jersey’s hardworking public employees. I applaud the Division of Investment for identifying this unique opportunity, exploring it, and acting upon it.”
The Emerging Managers program centers around a platform of Separately Managed Accounts (SMAs) that will source, conduct due diligence on, invest in, and oversee allocations to emerging managers.
“By creating an emerging managers program that targets growing firms there is value to be had in both the way we conduct business and as a strategy to create added returns. These managers will bring both a very high quality and a fresh viewpoint to money management,” said Deepak Raj, chair of the N.J. State Investment Council. “This platform will enhance exposure to unique and niche opportunities that are too small for larger funds.”
DOI plans up to $250 million in target investments that will be allocated to between 10 to 25 private equity funds.
“The Division of Investment continually seeks to allocate capital to the best risk-adjusted investment opportunities available. As part of that effort, we consistently look for ways to add improvements across our portfolios,” said Shoaib Khan, acting director of the Division of Investment.