New York City’s $105bn pension funds to pursue infrastructure

The city will look to invest in domestic infrastructure funds after making an initial investment in the asset class earlier this year and recently taking a beating in its US equity allocation, according to New York City Comptroller William Thompson.

New York City is considering allocating a part of the $105 billion of assets it manages on behalf of five city pension funds into infrastructure, according to statements made by New York City comptroller William Thompson on CNBC on Friday.

Thompson said the city is “starting to make movement in that direction now” after its portfolio, which had a 44 percent weight in US equities as of 30 June, saw its shares plunge. The Dow Jones and S&P 500 are down 24.9 percent and 22.5 percent, respectively, since 1 October.

Thompson said that the city is looking to domestic infrastructure funds, describing them as an area of growth “that will continue to see demand”. He did not name any specific funds or a target allocation level that the city would seek.

A spokesman for the comptroller did not immediately return calls seeking comment.

William
Thompson

Thompson said the city would not sell down its equities exposure in order to pursue infrastructure.

“It is not the time for us to get out [of equities] after taking that much of a hit. I think anyone who sells right now and is getting into cash is making a mistake,” he said. The city’s cash allocation as of 30 June was 1 percent.

The city began investing in infrastructure in April of this year when four pensions committed £75 to  the Emerald Infrastructure Development Fund, which primarily finances alternative energy, waste management and property development projects and focuses on Northern Ireland.

At the time, Thompson described the investment as the largest ever US public investment in the region and said on CNBC that he sees great growth potential in the fund.

Thompson’s office is custodian and investment advisor to the New York City Employees’ Retirement System, the Teachers’ Retirement System of the City of New York, the New York City Police Pension Fund Subchapter Two, New York City Fire Department Pension Fund Subchapter Two and the New York City Board of Education Retirement System.

Aside from cash and equities, the city’s other investments include a 7 percent allocation to private equity and other investments, 18 percent to international equities, 29 percent to US fixed income and a 1 percent “opportunistic” allocation. All figures are as of 30 June.