New York Pension Fund to Supplement Federal Small Business Loans

The New York state pension fund is shifting an existing $50 million investment in a small business loan program to the federal coronavirus relief program, which has drawn public criticism following a problem-laden rollout.

The New York State Common Retirement Fund (NYSCRF) already allocates money into business lender Pursuit, which typically lends to small businesses in the state for working capital, equipment or to buy real property, the New York comptroller’s office said Monday. In 2017, the NYSCRF had a $400 million commitment with the lender.

But the change shifts $50 million into the federal Paycheck Protection Program (PPP), which Pursuit is also administering for the state. The NYSCRF is also considering redirecting another $100 million into the coronavirus relief effort.

The federal small business loan program forgives loans if employers use the funds to keep workers on their payroll for at least eight weeks during the coronavirus crisis. The loans can also be used for rent, mortgage interest, or utilities.

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Thus far, Pursuit has directed $200 million to the state through the federal bailout program.

The loans, exclusively for New York businesses, are capped at $350,000. One-quarter is specifically meant for minority- or women-owned businesses.

“We are continuing to look for opportunities to help New Yorkers that are consistent with our fiduciary responsibility to the pension fund,” New York State Comptroller Thomas P. DiNapoli said in a statement.

In return for investing the capital, the NYSCRF gets a premium from Pursuit that is equivalent to the return from US Treasuries, which a fund spokesperson said is typically in the low single digits. Recently, US Treasuries have seen their yields drop, as nervous investors have bid up their prices. A 10-year Treasury returns just 0.63%, according to Bloomberg data.

The allocation change comes after reports of a bad start for the federal PPP, which was depleted early on, as large businesses corralled a chunk of the money. After coming under fire from the public, some employers, such as Ruth’s Chris Steak House and Shake Shack, returned their loans.

But other large applicants have not returned funds, leaving small business owners with 500 employees or less scraping at the bottom of the barrel for funds.

“New York small businesses are facing unprecedented challenges that have put more than a million men and women out of work,” DiNapoli said. “We’re doing what we can to help small businesses keep employees on their payroll, even if they may have paused operations.”

Earlier this month, the comptroller said the state came out of March with more cash than it expected, but warned that the cushion would erode quickly without federal aid.

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Tags: CARES Act, Comptroller, Coronavirus, COVID-19, New York, New York State Comptroller, Pension, Retirement, small business, Small Business Administration

Sally Dungan speaking on the finance industry in 2016. Photo courtesy of Tufts University.

Sally Dungan, the CIO of Tufts University’s $2 billion endowment, died of cancer on April 12, the university announced. Dungan, who was Tufts’ first and only CIO, had been at the helm of the endowment since 2002 and had increased its size by nearly three-fold from $680 million. She is credited with establishing Tufts’ Investment Office, which manages the university’s endowment.

“Sally Dungan brought to the management of Tufts’ investments a true sense of mission, as well as consummate professionalism, always keeping in mind the role of our endowment to support academic excellence not just today but for generations to come,” Tufts University President Anthony Monaco said in a statement. “She was deeply respected by our trustees and her administrative colleagues as well as by the team she built and mentored, and we will miss her as both a colleague and a member of our community.”

In addition to setting up the infrastructure for the investment office, the university said Dungan successfully partnered with others to create policies and procedures to manage and oversee Tufts’ investments.

“Sally literally grew the office from scratch, to create an incredibly highly functioning, collegial enterprise,” said Steven Galbraith, chair of the investment committee of the university’s board of trustees. “She took immense pride in the quality and integrity of her team—and their devotion to the university.”

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She was known as a strong advocate for education and mentorship and recruited analysts from among the university’s alumni as a way to encourage students to explore working in the field of investment management.

Prior to heading the endowment, Dungan served as the director of pension fund management for Siemens Corporation from 2000 to 2002 and was deputy CIO and senior investment officer of public markets for the Pension Reserves Investment Management Board of Commonwealth of Massachusetts from 1995 to 2000. Before that, she was administrative manager for Lehman Brothers from 1990 to 1995.

Dungan had also served on the boards of several public and private institutions, including the Eaglebrook School in western Massachusetts where her sons Joseph Henry and Bud (Samuel) Henry, attended school.

Dungan’s family has requested that donations in her honor should be made to the American Kidney Fund.