NY Retirement Fund Equity Program Invests $920M in NY Companies

May 5, 2006 (PLANSPONSOR.com) - A joint venture by New York Common Retirement Fund (CRF) and other investors to make combined equity investments in the Empire State has has funneled $425 million in capital into 15 different funds, a $321 million rise since the beginning of 2003, according to a recent report.

The  report by Comptroller Alan Hevesi’s shows that the number of companies that the fund has invested in has also climbed, from seven in 2003 to 64 in 2006.

The Common Retirement Fund’s (CRF) In-State Private Equity Investment Program was initiated in 1999 as an effort to diversify the fund’s portfolio and get a market rate of return in line with the risks linked to private equity, officials said. According to the report, the fund has helped boost the state’s economy and helped stimulate small businesses.

Changes to the Employment Retirement Investment Security Act (ERISA) in 1979 opened the gate to allow pension funds to make private equity investments, and by 2003, nearly 70% of North American investors – mostly pension funds and endowments – have allocated assets into private equity, with a median allocation of 8.2%, according to the report.

Instead of the CRF investing only its funds, the program acts more like a partnership where investors ally with the CRF to allocate money into a single private equity fund, that will then invest in different companies.