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September 17, 2013

 

State Pension Fund Searching For New York Investments

$1 Billion Allocated to In-State Private Equity Program for New York Companies;
Exited Investments Have Generated 20 Percent Return

New York State Comptroller Thomas P. DiNapoli today announced that nearly $400 million is available for investing in New York-based companies through the New York State Common Retirement Fund's In-State Private Equity Program. Since taking office in 2007, DiNapoli has added $624 million, or more than double the amount for investing, to the program for a total commitment of more than $1 billion.

DiNapoli released a report today on the progress of the In-State Program after hosting a roundtable discussion with private equity managers. The report's key points include:

  • $1.08 billion made available to private equity managers for New York State investments;
  • $684 million has already been invested in 252 New York State companies;
  • $293 million returned to the New York State Common Retirement Fund (Fund) on $179 million exited investments in 71 companies; and
  • $6.7 billion in total has been invested between the Fund and partner private equity firms, including $2.4 billion in Upstate New York companies.

"The In-State Private Equity Program has proven to be a win for the state's economy and for the state pension fund. For every dollar invested in exited companies, we've made $1.60," DiNapoli said. "We've invested in 252 companies in New York and put thousands of New Yorkers to work. We still have nearly $400 million that we want to invest in established, growing or startup companies. Our message to these entrepreneurs is if you're prepared to make a commitment to New York and can demonstrate a compelling case for our investment, we'll make a commitment to you and your business."

Through the In-State Program, the New York State Common Retirement Fund has established long-term partnerships with 18 private equity managers from around the state who invest in companies that require capital for growth, to refinance ownership or for early stage investment. The program is designed to provide investment returns consistent with the risk of private equity by making investments that meet fiduciary standards.

In addition to providing the Fund with a 20 percent internal rate of return on fully exited investments in the last five years, the program has helped generate jobs and private sector investment in New York. Since its inception, the program has helped create or retain nearly 4,000 jobs across New York, leveraging $6.7 billion in capital.

The state legislature created the In-State Private Equity Program in 1999 as part of the Jobs 2000 legislation. The original investment goal was $250 million, which DiNapoli achieved in October 2007. He later added $383 million to the program in November 2007 and another $241 million in later years.

In releasing the report, DiNapoli was joined by a private equity firm and a participating company to highlight the impact of the program.

"Without the support of Comptroller DiNapoli and the Fund, we would not have been able to invest in New York-based companies such as Huffington Post, Buzzfeed and Buddy Media that have created several thousand jobs and delivered returns in the upper quartile for all venture capital investments in the country over the last eight years," said Jordan Levy, CEO of Softbank Capital. "With the new fund, we will generate additional returns for the New York State Common Retirement Fund and help local companies brighten the digital future for all New Yorkers."

The Fund has provided $100 million to Buffalo-based Softbank Capital to invest in New York companies. The first $50 million investment in 2005 generated 43 investments. Another $50 million allocation was made in May 2013.

"Support from the New York State Common Retirement Fund's In-State Private Equity Program has been instrumental to the growth and expansion of Autotask. Since embarking on this partnership, we have quadrupled the number of employment positions in the Capital Region," said Mark Cattini, CEO of Autotask. "We now help 5,000 customers provide technology services more efficiently and profitably to their two million clients around the world. Our success is evidence of what a program like this can mean to high-tech companies in New York State."

The Fund has made two investments totaling $6.3 million in Autotask, located in East Greenbush. The most recent investment was through Hamilton Lane for $3.3 million in 2008.

Throughout the fall, DiNapoli will be holding meetings and participating in events to inform New York entrepreneurs and businesses about the opportunities available through the In-State Program. His first event was in Rochester on Sept. 16 and other events will be held in Buffalo and Syracuse in the coming weeks.

Investment data by year and region follows:

Basic Region # of Companies Dollar Amount
NYC Total 167 278.3
Suburbs Total 22 98.0
Upstate Total 63 308.0
Total 252 684.3

 

Region # of Companies Dollar Amount
Capital District 13 75.3
Central 4 27.5
Finger Lakes 21 81.2
Hudson Valley 17 69.8
Long Island 8 36.2
Mohawk Valley 2 27.2
North Country 2 10.5
NYC 167 278.3
Southern Tier 6 23.0
Western 12 55.3
Total 252 684.3

Copy of the progress report

More information on the program or company eligibility

About the Common Retirement Fund
The New York State Common Retirement Fund is the third largest public pension plan in the United States with more than one million members, retirees and beneficiaries from state and local governments. The Fund has a diversified portfolio of public and private equities, fixed income, real estate and alternative instruments and was valued at $160.4 billion for the fiscal year ending March 31, 2013.

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