A strong equities performance helped propel the New York State Common Retirement Fund to an 11.55% investment return for the fiscal year ended March 31, easily beating its long-term expected rate of return of 5.9% and raising its asset value to $267.7 billion.
The NYCRF’s top-performing asset class was domestic equities, which returned 28.98%, followed by global equities, which earned 24.29%. Multi-asset strategic partnerships returned 14.80%, non-U.S. equities rose 14.21%, and opportunistic/absolute return strategies increased 11.17%.
Credit investments returned 10.65%, while real assets and private equity were up 8.16% and 6.85% respectively. Cash returned 5.5% and fixed-income investments increased 2.65%. The only asset class that didn’t see a gain was real estate, which was down 9.72%.
“Strong performances across asset classes helped drive the state pension fund’s investment returns higher over the past year, with many companies reporting better-than-expected earnings and consumer spending remaining strong,” New York State Comptroller Thomas DiNapoli said in a statement. “While inflation persists and global tensions pose risks to investors, the fund, thanks to its prudent management and long-term approach, is well positioned to weather any storms.”
As of March 31, the NYCRF’s asset allocation was 26.80% domestic equities, 20.51% fixed income, 14.60% private equity, 11.83% non-U.S. equities, 9.33% real estate, 4.50% credit, 3.44% global equities, 3.44% real assets, 3.02% opportunistic/absolute return strategies, 1.33% cash and 1.20% multi-asset strategic partnerships.
Despite the robust equity performance, the pension fund continued to cash out of public equity funds and terminated Baillie Gifford Investment Management, an international equity fund valued at $1.9 billion in April, according to its most recent monthly transaction report. In March and April alone, the NYCRF divested $3.8 billion worth of public equities, compared with approximately $4.6 billion for all of last year.
In addition to terminating the equity fund, the pension plan committed $108 million worth of investments in April, including $58 million within its emerging manager program and $50 million within its real assets portfolio.
Under its emerging manager program, which invests in newer, smaller and diverse investment management firms, the pension fund earmarked $50.5 million for the ZM Capital Fund IV, advised by HarbourVest Partners. The fund seeks to acquire lower-middle-market North American tech-enabled companies in the media, entertainment and communication sectors.
Also under the emerging manager program, the pension fund committed $7.5 million to the GP5 Sidecar JV fund through the Empire GCM RE Anchor Fund. The fund will invest along with the Griffith Fund V in life science and industrial/flex investment opportunities.
And within its real assets portfolio, the pension fund committed $50 million to the DigitalBridge Partners III fund. The closed-end fund aims to acquire digital infrastructure assets, including macro cell towers, data centers, fiber, small cell networks, edge infrastructure and other related businesses.
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Tags: Baillie Gifford Investment Management, emerging manager program, fiscal 2024 returns, New York State Common Retirement Fund, NYCRF, Pension Fund, Public Equity, Real Assets, Thomas DiNapoli