New York State Pension Fund Invests More Than $1.4B in June

Nearly half of the commitments were made to three private equity funds.




The $248.5 billion New York State Common Retirement Fund committed more than $1.4 billion in investments in June, nearly half of which were made through the pension fund’s private equity portfolio, according to its latest monthly investment report.

The pension fund earmarked approximately $685 million to three funds within its private equity portfolio, including $450 million to the TA XV fund from TA Associates, which seeks investments in the consumer, financial services, technology, business services and healthcare sectors.

Another $125 million is going to the EagleTree Partners VI fund, managed by EagleTree Capital. The fund will target investments in the consumer, specialty industrials, and media and business services sectors, primarily in North America.

The pension fund also is setting aside 100 million euros ($110 million) to the Providence Strategic Growth Europe II fund from PSG Equity. The fund will focus on software and technology-enabled companies in Western Europe.

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Within its credit portfolio, the pension fund committed $475 million to two funds, including $375 million to the MSD Empire Fund from MSD Partners. The fund is a separately managed account targeting opportunistic investments, mainly in privately negotiated loan packages to non-sponsored companies. MSD Partners is a new relationship for the pension fund.

The remaining $100 million will be invested in the CVI Excelsior Opportunities Fund from AB CarVal Investors LP. The fund is a separately managed account that will invest alongside, in certain situations, the CVI Clean Energy Fund B II and will capitalize on credit opportunities in clean energy, renewable energy and energy storage.

The pension fund also committed approximately $237.4 million within its real estate portfolio, including $150 million to the Bell Value-Add Fund VIII fund from Bell Partners Inc. The fund is a closed-end commingled fund that seeks to acquire high-quality, mid-to-large-sized apartment communities in select major U.S. markets. Bell Partners will be a new relationship for the pension fund.

Approximately $87.4 million will be invested in the ComRef Homestead Square shopping center in Cupertino, California, through a MetLife Investment Management Separate Account. The property is currently 99.2% leased.

The pension fund also committed almost $19.2 million to the Long Ridge Equity Partners IV fund through the NYSCRF Pioneer Partnership Fund A, advised by HarbourVest Partners LLC, an emerging manager program partner within the private equity asset class. The pension fund’s emerging manager program aims to invest in newer, smaller and diverse investment management firms.

In addition to the more than $1.4 billion in investment commitments, the pension fund terminated its investment in the Rock Creek Adirondack Emerging Markets Fund, an emerging markets fund-of-funds manager within the pension fund’s public equity portfolio. The value of the account was approximately $566 million, which was allocated to cash.


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New York State Common Retirement Fund Invests More Than $3B in May

New York’s State Pension Commits $2B in Investments in April

New York Common Commits More Than $600 Million in March Investments

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PBGC’s Insurance Programs Are in Strong Financial Shape, Report Says

Both single and multiemployer programs are in the green for years into the future.



The Pension Benefit Guaranty Corporation published its Projections Report for Fiscal Year 2022 Wednesday, showing both the single and multiemployer plan programs in strong financial positions and expected to remain solvent through their projection periods.

The PBGC said that “the projections show no scenarios in which the Single-Employer Program runs out of money within the next 10 years.” The net financial position of the program is also expected to improve over the next 10 years, largely due to improved plan funding, which reduces the PBGC’s expected liabilities.

The PBGC expects the single-employer program to have net assets of $63.6 billion in 2033, an improvement on the $53.3 billion it projected last year for 2032. The single-employer program has 22.3 million participants.

The PBGC reported similarly rosy results for the multiemployer program. The corporation said that the median projected insolvency date for the multiemployer program was 2062, which was the end of the projection period. Prior to the Special Financial Assistance Program included in the American Rescue Plan Act, the projected insolvency date was 2026. The multiemployer program covers 11.2 million participants.

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The report also stated that the PBGC expects $79.7 billion to be paid out in total under the SFA program. The estimate is based on the amount already paid out, pending applications and potentially eligible plans that may apply in the future.

The strong financial status of the two programs drew industry comment concerning the insurance premium rates paid by pensions to the PBGC. A statement from the ERISA Industry Committee said the surplus “should cause Congress to reexamine the premiums paid by companies that sponsor defined benefit pension plans.”

The statement from ERIC also recommended decoupling PBGC funding from general federal budget scoring, which can create perverse incentives that allow the PBGC to go overfunded to “offset” other spending priorities, including those “unrelated to the retirement system.”

John Lowell, a partner at October Three, an actuarial consulting firm, says that “every plausible projection shows that the fund will remain significantly overfunded for the foreseeable future.” Congress should take this opportunity to reduce premium rates, which he says “cause plan sponsors to either terminate their plans or to de-risk through pension risk transfer or lump sum windows.”

Lowell adds that the difference in median and mean projections in the report for multiemployer plans suggests that some projections likely anticipate the insolvency of a small number of large plans and that Congress should assist the PBGC to prepare for this possibility.

Section 349 of the SECURE 2.0 Act of 2022 capped the premium variable rate for the underfunded portion of single-employer plans at 5.2% of the plan’s unfunded liabilities. The rate had previously been tied to inflation.

All other items that are used to calculate PBGC premiums, however, remain tied to inflation. That includes the amount paid per participant ($96 for single-employer and $35 for multiemployer for 2023), as well as the cap per participant paid on a plan’s unfunded liabilities ($652).

Lowell recommends that Congress “eliminate the annual inflationary increases” and “reduce fixed rate premiums and the percentage of underfunding subject to variable rate premiums.”

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