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Asset Allocation

NY Common Commits $1 Billion to BlackRock Public Equity Fund

The investment accounts for half of the $242 billion pension fund’s January commitments.

By Michael Katz



The $242 billion New York Common Retirement Fund committed approximately $2 billion in new investments in January, half of which was earmarked within its public equity portfolio, according to the pension fund’s monthly transaction report.

The pension fund committed $1 billion to the BlackRock MSCI Climate Change Index strategy within its public equity portfolio, which will be externally managed in a commingled account by BlackRock. The NYCRF added that the investment was funded from cash and securities.

The pension fund also committed $700 million within its opportunistic absolute return strategies, in which the pension fund invests with general partners and investment managers who invest across asset classes on an opportunistic basis or in direct transactions. The $700 million was split evenly between the Patient Square Equity Partners fund and the PSC EP Discretionary Co-Invest III fund, both of which are managed by Patient Square Capital—a new relationship for the NYCRF.

The Patient Square Equity Partners fund makes select investments in growth-oriented companies with broad exposure to the healthcare sector. The PSC EP Discretionary Co-Invest III fund seeks co-investment opportunities that are consistent with its portfolio construction principles and that complement capital availability from co-investors.

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Within the pension fund’s real estate portfolio, the NYCRF committed $200 million to the Artemis Real Estate Partners Fund IV managed by Artemis Real Estate Partners. The closed-ended fund aims to make debt and equity investments in middle-market real estate and real estate-related businesses in the U.S.

Also within its real estate portfolio, the pension fund invested a little more than $68.1 million in a portfolio of two multifamily buildings with 78 residential units in the Williamsburg neighborhood of Brooklyn, New York. The portfolio was acquired through the MetLife Investment Management Separate Account.

Within its emerging manager program, which invests in newer, smaller and diverse investment managers, the pension fund invested up to $15 million in the Raith Real Estate Fund III fund, which will focus on debt and equity investments.

Additionally, the NYCRF terminated its investment in the ValueAct Capital Partners II fund managed by ValueAct Capital. The account value was approximately $182 million, which was allocated to cash.

Related Stories:

New York Common Retirement Fund Cuts Public Equities in Favor of Alts
New York Common Earmarked More Than $1.1 Billion to Alts in December

New York State Comptroller Files Diversity Proposals

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Home > News > Risk > Grayscale Launches Appeal Against SEC, and Its Shares Rally
Risk

Grayscale Launches Appeal Against SEC, and Its Shares Rally

The sponsor of its battered bitcoin fund labels as “arbitrary” the agency’s nixing of its ETF conversion request.

By Larry Light

Cryptocurrency asset manager Grayscale Investments attacked the Securities and Exchange Commission’s denial of its plan to convert its bitcoin closed-end fund into an exchange-traded fund. In spirited remarks Tuesday, Grayscale’s attorney slammed the SEC ruling as the “definition of arbitrary decision making.”

Grayscale Bitcoin Trust’s long-suffering stock price rose 9.6% Tuesday after the opening hearing on its lawsuit against the agency. That’s some unaccustomed good news for the trust, the largest bitcoin fund. The shares have dropped almost in half from 12 months ago and about 80% from their peak in 2021, when crypto was riding high.

The suit, Grayscale Investments v. Securities and Exchange Commission, under review before the U.S. Court of Appeals for the District of Columbia Circuit, turns on the firm’s ability to expand its availability to the market and perhaps reverse its long price decline.

If the Grayscale fund could convert to ETF status, it could then easily create and redeem shares, a liquidity-enhancing plus for Grayscale. CEFs generally lack those features. Previously, Grayscale had tried treating its fund like an ETF, able to issue new shares, but in 2014, the SEC barred the practice.

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To the SEC, the problem with the Grayscale proposal is that it is based on spot bitcoin prices. The regulator says these spot prices are open to manipulation. The commission has, however, greenlighted other bitcoin ETFs that track bitcoin futures, which the SEC believes are safer.

Grayscale argues that the difference between spot and futures prices is not so great as to merit its fund being barred from becoming an ETF. Bitcoin changes hands via lightly regulated crypto exchanges such as Coinbase (i.e., the spot market), while the coin’s futures trade on the highly regulated Chicago Mercantile Exchange. The SEC also has turned down other requests to switch spot-price crypto funds into ETFs.

The spot and futures vehicles are essentially “like” products, with “99.9% correlation,” Grayscale’s lawyer, Don Verrilli, a former U.S. solicitor general and a partner in Munger, Tolles & Olson, told the three-judge panel, Yahoo Finance reported. 

The SEC countered that Verrilli’s contention is unproven. “The key empirical question is whether fraud and manipulation in the spot market impacts CME futures in the same way,” Emily True Parise, an attorney for the SEC, told the court. “We don’t have conclusive data.”

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