NJ Moving Forward with Taking Alternatives Position

March 25, 2011 (PLANSPONSOR.com) – The New Jersey State Investment Council has approved moving forward with an asset allocation plan that would put up to 38% of the $71.6-billion fund’s asset in alternative investments.

The Asbury Park Press reported that the policy is expected to be approved in May. Chairman Robert E. Grady contends the changes will not only provide better returns, but also make the overall pension portfolio safer by making it less subject to increasing interest rates or stock market swings.

Union representatives on the council are opposed and prefer the state stick with a traditional mix of stock and bonds, the newspaper said.

The Park Press said a total of $800 million in new alternative investments to be made in hedge funds and private equity firms were detailed this week.

Timothy Walsh, director of the Division of Investment, noted that the state’s pension funds were up just over 15% through the first eight months of the fiscal year that began in July, led by outsized gains in the U.S. stock market, according to the news report. Investment officials said the state had made $435 million from private equity firms in the past three months.