New York Common Retirement Fund Cuts Public Equities in Favor of Alts

The New York State Common Retirement Fund cut back a significant portion of its public equities holdings during 2022 in favor of alternative investments, with the most significant boost going to real estate and real assets.

At the end of 2022, the fund’s asset allocation was 43.49% in publicly traded equities; 22.07% in cash, bonds and mortgages; 14.77% in private equity; 13.43% in real estate and real assets; and 6.24% in credit, absolute return strategies and opportunistic alternatives.

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Based on a comparison of the fund’s asset allocation at the end of 2022 and the end of 2021, the fund cut back its allocation to publicly trade equities and increased its allocations to real estate and real assets; private equity; and credit, absolute return strategies and opportunistic alternatives.

The NYCRF reduced its public equities allocation by nearly 8 percentage points from 51.38% at the end of 2021, while it increased its allocation to real estate and real assets by nearly five percentage points from 8.52% one year earlier. The allocation to private equity was raised by more than two percentage points from 12.36%, and the allocation to credit, absolute return strategies and opportunistic alternatives was increased less than one percentage point from 5.37%. The fund also slightly lowered its holdings in cash, bonds and mortgages from 22.37%.

The updated asset allocation was included in the pension fund’s financial report for its fiscal Q3, which ended on December 31, 2022, which showed a robust return of 4.51% that raised its asset value to $242.3 billion from $233.2 billion the previous quarter. By comparison, the fund lost an estimated 3.85% during the previous quarter and returned 4.74% during the same quarter in 2021, when its estimated value was $279.7 billion.

“The equity markets had some difficult times in 2022, but the fund posted positive results for the quarter,” New York State Comptroller Thomas DiNapoli said in a release. “Market volatility may persist in 2023, but the fund remains well-diversified and built to handle these ups and downs.”

The fund also announced it paid out just under $3.8 billion in retirement and death benefits during the quarter.