NY Closing In On Emerging Manager Adviser

The $155 billion New York State Common Retirement Fund is in the final stages of its search for a manager of its private equity emerging manager program, according to Thomas DiNapoli, the state comptroller and sole trustee of the fund.

“We are weeks away from making a choice, and the interviews are moving along. We have an adequate pool to choose from,” DiNapoli said at a June 11 meeting. The RFP was issued in November 2007 and responses were due in January. A decision will likely arrive by the end of the summer.

The pension fund expects to allocate $1 billion over the next several years to emerging managers. The program seeks exposure to newer private equity partnerships with assets of less than $750 million that have a hard time accessing large institutions. Eventually, those managers will serve as a feeder to the Common Retirement Fund’s core investment portfolio.

The limited partner is looking to hire one or more advisers that will invest in emerging managers across multiple strategies. That includes fund commitments, buying interests in general partnerships, and investments alongside emerging managers such as co-investments. The LP prefers to use a customized, separately managed account but will consider existing funds. The mandate emphasizes identifying and investing in historically undercapitalized segments of the private equity market.

Separately, the Common Retirement Fund recently made its latest commitment to its in-state private equity program by infusing SmartPill Corp., a Buffalo-based medical technology company, with $1.25 million to relocate its manufacturing facility from Los Angeles to upstate New York. The in-state program was created in 2000 and invested $345 million in 117 companies through mid-2007; since taking office a year ago, DiNapoli has committed an additional $408 million to the program.

DiNapoli also said that he is in preliminary discussions with Canadian firms, in the hopes that they will relocate to New York state and bring jobs with them. “The negative of the dollar being weak produces opportunities,” said DiNapoli.