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DiNapoli: State pension fund adds $350 million to investment funds geared to New York companies


Tue, Jun 14th 2022 12:25 pm

NY's in-state investment program the largest in nation; over $2 billion committed to help grow state-based companies

The New York State Common Retirement Fund is committing another $350 million to two investment funds through its in-state private equity investment program, fund trustee and state Comptroller Thomas P. DiNapoli recently announced.

“The in-state program has helped hundreds of New York businesses add and retain thousands of jobs and grow while achieving solid returns for the retirement system members and their beneficiaries that rely on the pension fund for their retirement security,” DiNapoli said. “We’ve committed more than $2 billion through this program to invest in New York state companies, and I’m proud to continue building on our successful track record.”

The fund will provide $50 million in additional capital to the Hudson River co-investment fund III, which it already invests in, and another $300 million in the new Hudson River co-investment fund IV. The funds make equity co-investments (investments alongside a lead sponsor) in growing New York-based companies.

Hamilton Lane will manage the funds. The firm has a 20-year track-record of managing these types of funds.

“We are pleased to continue to support the mission of the New York State Common Retirement Fund by facilitating their direct investment program into businesses across New York state,” said David Helgerson, managing director at Hamilton Lane. “Throughout this process, we have supported companies of all sizes, with diverse ownership and missions and within sectors ranging from software and manufacturing to health care and renewable energy generation. We are proud to have helped deliver strong returns to the fund while simultaneously supporting the economic growth and vitality of people and businesses throughout the state.”

The funds will follow the strategy of previous funds with investments of $5 million to $20 million in rising companies throughout the state. The funds will generally invest in health care, technology, transportation, business services and manufacturing companies. 

The fund will build a portfolio of 16 to 18 co-investments, diversified by year, strategy and industry. The companies are generally valued between $10 million and $1 billion.

The in-state program is the largest and most comprehensive of any home state focused pension investment program in the U.S., and has now committed $2.1 billion to 56 funds. DiNapoli has added $1.7 billion of new commitments since taking office.

The fund has built a portfolio of New York investments that is diversified by geography, stage of investment and industry. In total, $1.6 billion has been invested in 522 New York companies, up from 79 in 2007. More than 50% of the capital has been invested in counties outside New York City.

The program has returned over $1.5 billion on $848 million invested in 251 transactions (as of March 31, 2021), with a 10% internal rate of return from 15 realized investment commitments.

The New York State Common Retirement Fund is one of the largest public pension funds in the U.S., with assets of approximately $279.7 billion as of Dec. 31, 2021. The fund holds and invests the assets of the New York State and Local Retirement System on behalf of more than 1 million state and local government employees and retirees and their beneficiaries. It has consistently been ranked as one of the best managed and best funded plans in the nation.

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