New York City Plans $2 Billion Secondary Sale

The New York City Bureau of Asset Management, which administers the city’s $119 billion pension system, is set to sell about $2 billion in private equity investments on the secondary market, according to a source not authorized to speak on the record.

Such a sale, which would represent about 15 percent of the system’s $13 billion in private equity commitments, is part of a repositioning of the portfolio to reduce the number of general partners and increase the portion of top-quartile funds, the source said. News of a possible secondary sale was first reported by Bloomberg. The city’s portfolio has $7 billion in invested private equity capital.

For Larry Schloss, the Bureau of Asset Management’s new chief investment officer, a private equity sale of this size would represent an opportunity to put his imprint on the system’s portfolio.

In a March interview with Buyouts magazine, Schloss said he planned to reduce the number of private equity manages within the portfolio, but said that doing so would take time. New York City’s five pensions have invested in 170 private equity funds managed by 110 general partners. “One of the problems with having too many funds is that you have too little money with each fund,” Schloss said.

Schloss, who has been the chief investment officer of New York City’s pensions since 2010, grew to prominence as a co-founder of Diamond Castle, a private equity firm, and at Credit Suisse, where he headed its private equity group.

New York City’s pension system, which is overseen by Comptroller John Liu, provides benefits for more than 500,000 current and former city employees.