New York State Common Retirement Fund (Fund) assets managed by Minority and Women-Owned Business Enterprise (MWBE) managers grew from $20 billion to approximately $27 billion in state fiscal year 2020-21 and the Fund’s Emerging Manager program grew from $6.7 billion to $9 billion, State Comptroller Thomas P. DiNapoli, trustee of the Fund, announced today.
“As part of our work to ensure that the New York State Common Retirement Fund remains one of the best managed and best funded public pension funds in the nation, we have built new opportunities for asset management with Emerging Managers and Minority- and Women-Owned Business Enterprises, and it has paid off,” DiNapoli said. “There is more work to do, but diversity has strengthened our bottom line and demonstrates that expanding opportunities and access is not only the right approach – it’s the best approach.”
Approximately half of the Fund’s assets are managed internally by its own diverse staff. Of the $127 billion of Fund assets that are actively and externally managed, 21.5%, or more than $27 billion, have been allocated to MWBEs, up from 21% a year earlier.
While the Fund’s 2020-21 fiscal year saw market disruptions from the global COVID-19 pandemic, the Fund continued its steady deployment of capital to MWBE firms. Increases in value over the previous year were particularly strong in the Real Estate & Real Assets, Fixed Income, Opportunistic Investments and Private Equity asset classes.
The Fund’s Real Estate & Real Assets portfolio made an additional $200 million commitment to Grain Management LLC. Its Fixed Income portfolio made an additional allocation of $250 million to New Century Advisors, and Opportunistic Investments made an additional $400 commitment to Stellex Capital Management. Gains were particularly strong in the Private Equity portfolio, which grew by more than $700 million.
The Fund makes a portion of its investments with MWBE firms through its Emerging Manager program, which DiNapoli expanded in 2008. The program seeks out smaller, talented firms and as they succeed, increases the Fund’s commitments until they graduate to the main portfolio. The program leverages the Fund’s resources with the help of 11 program partners and currently works with 176 emerging managers, 75% of which are MWBEs.
Under the MWBE Asset Management and Financial Institution Strategy enacted in 2010, DiNapoli and the Fund’s staff have worked to develop a set of best practices to open doors to MWBEs in the financial services industry and to encourage competition. The strategy includes educating diverse market participants about opportunities to do business with the Fund, establishing relationships with highly qualified MWBEs in the investment arena, and building a pipeline of investments and service providers.
DiNapoli and the Fund report the details of their MWBE investments annually.
About the New York State Common Retirement Fund
The New York State Common Retirement Fund is the third largest public pension fund in the United States with assets of approximately $254.8 billion as of March 31, 2021. The Fund holds and invests the assets of the New York State and Local Retirement System on behalf of more than one million state and local government employees and retirees and their beneficiaries. The Fund has consistently been ranked as one of the best managed and best funded plans in the nation.