About the Common Retirement Fund
The New York State Common Retirement Fund (CRF) was created in 1967 and holds the assets of the New York State and Local Retirement System. As of September 30, 2011, the total invested assets of the Fund were approximately $134 Billion. The Comptroller is the sole trustee of the CRF and administrative head of the Retirement System. The New York State Comptroller is responsible for the investment of the Fund, and manages a diversified portfolio of public and private equities, fixed income, real estate, and alternative investments.
Private Equity
Contact: Arthur Wang (awang@osc.state.ny.us)
The Fund’s Private Equity Investments are managed by the staff of the Division of Pension Investment and Cash Management. The Fund's private equity portfolio is designed to provide returns that exceed those of public equities.
Investments in this area are private placements that include leveraged buyouts, venture capital, special situations, and similar investments in the form of participation in limited partnerships and co-investments.
Private Equity also invests in various fund-of-funds vehicles, which are investments in a portfolio of private equity funds. The fund-of-funds strategy has two primary objectives — to enhance overall diversification of the private equity portfolio, and to supplement the portfolio with smaller funds.
In general, the Fund uses consultants and investment partners to assist in determining investment decisions. In addition, the Private Equity group invests through targeted mandates such as the Emerging Manager, Green, and In-State investment programs.
Real Estate
Contact: Michael Reilly (Interim) (mreilly@osc.state.ny.us)
The Real Estate Unit is responsible for the prudent management and investment of the Common Retirement Fund's real-estate-related investments, which include directly owned real estate, joint ventures, public securities, commingled funds and mortgage loans. The unit's objective is to enhance the performance of the Fund consistent with prudent underwriting standards, alternative investment opportunities and maturity and liquidity needs.
The Real Estate Unit invests in real-estate projects primarily through joint-venture partners. Each venture is overseen by one of the Fund’s real-estate advisors.
External Equity Management
Contact: Maureen Kipper (mkipper@osc.state.ny.us)
The Comptroller utilizes external investment managers to manage portions of the CRF portfolio to achieve optimum performance results in concert with diversification of CRF assets. The External Equity Management Unit is responsible for recommending the selection and termination of external equity managers, as well as negotiating contracts and overseeing their work. In addition, the unit is responsible for recommending structural changes to the domestic Performance and international equity asset classes.
External equity managers are selected on the basis of past performance, investment style, organizational strength and complementary fit within the overall equity portfolio structure. The CRF works in collaboration with its general consultant, RV Kuhns, to select equity managers rather than utilizing a general Request for Proposal (RFP) process. The consultant, with input from the CRF, conducts an extensive search and recommends a list of finalists for the CRF's review and consideration. In addition, the CRF maintains a fund-of-funds program with Progress Investment Management, Inc. and FIS Funds Management, Inc. for emerging, minority-and women-owned equity management firms.
Absolute Return Strategies
Contact: Arthur Wang (Interim) (awang@osc.state.ny.us)
The Fund invest in funds employing strategies with objective for capturing long-term equity-like returns while maintaining fixed income-like volatility. These funds invest though a number of strategies across all asset classes and securities. The program seeks uncorrelated returns to the equity markets, while achieving diversification through a multi-manager and multi-strategy approach thereby lowering the overall risk in the portfolio. The Fund included a substantial restructuring of the absolute return program in FY 2009. The purpose of the restructuring effort was to eliminate the redundancy between external fund of fund managers, lower the overall cost structure of the program, and achieve better risk adjusted returns. The Fund determined that a primarily direct investment portfolio, with a reduced number of funds would accomplish these goals.
Internal Equity Management
Contact: Robert Arnold (rarnold@osc.state.ny.us)
The majority of the Fund's domestic equity exposure is managed and traded by internal staff. Since 1978, the Fund's internal domestic equity staff has utilized indexing strategies as a low cost and efficient method to gain exposure to the U.S. equity markets. Nearly three-quarters of the domestic equity exposure is managed using structured index management. Internal staff now manage the following funds: S&P 500, S&P MidCap 400 and S&P SmallCap 600. The staff continually strives to lower costs and improve the efficiency of equity trading.
Fixed Income
Contact: Donna Benson (dbenson@osc.state.ny.us)
All of the Fund's fixed income assets as well as the State and State-related short-term assets are managed internally. The Fund's long-term portfolio is managed to meet the cash flow requirements of the System's pension liabilities and to offset the volatility of the equity holdings. The Fund's short-term portfolio is used as a source of liquidity for monthly pension payments and to accommodate the disbursement and funding needs of the various investment units.
State funds are invested through a short-term investment pool (STIP). STIP was established in 1976 and was intended to maximize investment returns in a safe and secure manner, using the investment expertise of the Fund's investment staff. The investment objective of STIP is to obtain the maximum yield consistent with safety of principal, and to develop a portfolio which emphasizes quality, diversity where possible, and marketability.
Opportunistic Portfolio
Contact: Tyson Pratcher (tpratcher@osc.state.ny.us)
The Opportunity Portfolio ("OP") is in keeping with the CRF history of increasing portfolio diversification and targeting the best risk-adjusted results. The OP provides CRF with the flexibility to invest in strategies that do not fall within other asset classes and/or are a result of intermediate term market dislocations. Areas of opportunity may include but not limited to: distressed assets, alternative fixed income, hybrid securities, multi-asset class strategies and emerging or niche strategies. The foregoing will be implemented via the formation of a variety of structures including direct ownership, comingled funds, joint ventures, co-investments and strategic partnerships. The constituents of this portfolio are not pre-determined but capital is allocated based on the current opportunity set and weight of existing risk in the portfolio.
Fund Facts
- Third largest pension plan in the United States
- 3,035 state and local government employers participate in the pension system
- More than 1 Million members, retirees and beneficiaries
- $7.66 billion paid out in benefits in FY 2010-2011