New Jersey Earmarks $800M to Private Credit, PE, Hedge Funds
The New Jersey Division of Investment, responsible for managing $67 billion in retirement system assets, allocated $800 million to various private credit, private equity, and risk mitigation initiatives in July.
The most significant investment was a $300 million allocation to a private credit Separately Managed Account (SMA) focused on emerging managers, overseen by GCM Grosvenor. The SMA will allocate funds to companies engaged in specialized credit strategies expected to enhance the current direct lending portfolio within the program. The credit program totals $5.1 billion.
The $7.6 billion private equity program saw commitments to two managers, including Coller Capital and Summit Partners. Coller saw a $150 million mandate for its Coller International Partners IX-G and another $50 million allocation to a co-investment vehicle. The fund strategy is focused on secondaries.
The latest vintage fund will be 45% LP-led and 55% GP-led, with diverse exposure across vintage, manager, sector, and location. Fund IX will make 50-55 investments totaling $180 million to $220 million.
Summit will receive $100 million for Summit Partners Growth Equity Fund XII A. The approach is consistent with previous Summit funds, as it focuses on purchasing minority and majority stakes in North American growth firms in technology, healthcare and life sciences, and growth products and services. Fund XII plans to make 25-35 investments ranging from $75 million to $500 million.
Cliffwater suggested two more funds for the $1.9 billion risk mitigation strategies for hedge funds. Capula Investment Management will oversee the management of both funds and provide a defensive investment strategy for the public pension.
The approval of a $100 million commitment has been granted for the Capula Tail Risk Fund – Dynamic Class. The dynamic share class enables New Jersey to utilize pre-established triggers to take advantage of market stress events.
The second Capula fund employs a fixed income arbitrage strategy. Authorities are allocating $100 million to the Capula Global Relative Value Fund. The fund allocates its investments to bonds that aim to generate stable returns without being influenced by market conditions, with the objective of achieving a Sharpe ratio greater than 1.
As of May, risk mitigation strategies have increased by more than 6% year-to-date. Earlier this year, mandates totaling $300 million were approved for Man Group, Graham Capital Management, and PIMCO.