The allocation increases would turn the institutions into major players on the private equity scene.
The New York City Office of the Comptroller is helping to coordinate the asset allocation studies. The comptroller serves as an investment advisor to five municipal pension plans – the New York City Employees’ Retirement System; the Teachers’ Retirement System; the Police Pension Fund; the Fire Department Pension Fund; and the Board of Education Retirement System. Together, these five pensions manage assets valued at roughly $75bn.
The pensions, with the exception of the Board of Education Retirement System, are about to complete major asset allocation studies. Sources close to the pensions expect the studies to recommend a “significant increase” in target allocations to private equity. In 1997, private equity consultant Pacific Corporate Group helped the four pensions establish two per cent target allocations to private equity.
The four pensions are also expected to increase their respective allocations to real estate.
Each pension has its own board of directors and makes independent decisions on investment opportunities.