New Jersey Division of Investment

New Jersey Pension to Invest $300 Million in U.S. Apartments

The New Jersey Division of Investment, the entity that invests the state’s pension assets, has committed $300 million to be invested in the U.S. apartment sector.

The New Jersey Division of Investment has formed a $303m (€267.8m) separate account relationship with TGM Associates to invest in US apartments.

The pension fund allocated $300m for its 99% ownership of the account, in which TGM will hold $3m (1%).

The account, the pension fund’s first with TGM, will pursue a non-core strategy.

New Jersey is currently under-allocated to the apartment sector, with 16% of its portfolio invested in the property type.

Average multifamily exposure across the NCREIF-ODCE Fund Index is around 25%.

TGM’s investments in apartments for previous separate account relationships was a decisive factor for New Jersey.

A separate account for a large public fund delivered a 10.5% net IRR and a 1.9x multiple of invested capital since inception.

The Division of Investment managed $81.22 billion in pension assets as of July 2014.

New Jersey Pension Hires Deputy Director

New Jersey’s Division of Investment, the department that manages assets for the state’s pension systems, has hired Corey Amon as its new deputy director. From Chief Investment Officer:

The New Jersey Division of Investment has hired a deputy director to help manage $80 billion in state pension fund assets.

Corey Amon joins the fund from the corporate pension world. He has spent the last three years in Miami as assistant treasurer of Ryder System, a Fortune 500 trucking and logistics company. But Amon spent the bulk of his career to date as an asset manager. From 1995 through 2011, he worked at a BMO Global Asset Management division called Taplin, Canida & Habacht.

Amon’s first day at the pension’s Trenton offices is set for October 20, a treasury department spokesperson told CIO. He will report to and work closely with Chris McDonough, the fund’s director and #77 on this year’s Power 100 list. McDonough said he and the team are “delighted to have Corey joining the division of investment.”

McDonough noted Amon “has nearly 20 years of investment experience,” including service as a fiduciary. “We expect him to play an intricate role in all aspects of portfolio and operations management at the division,” the director concluded.

Despite its massive size and consistent outperformance, New Jersey’s pension fund has struggled to hold onto its top investment staff. Its pay packages are thin even by public fund standards, and offer no incentives for performance.

McDonough, for example, earns a $185,000 salary, according to public records.

Amon was previously Assistant Treasurer at Ryder System, Inc. Before that, he was the Director of Research at Taplin, Canida & Habacht where he managed a fixed income portfolio.

New Jersey Senate Moves To Tighten Pension Pay-to-Play Rules

A New Jersey Senate committee on Thursday approved a bill that would broaden the state’s pay-to-play rules regarding pension investments.

The bill intends to further strip out politics from pension investments: the new rules would prohibit the state’s pension fund from investing in firms that have recently made donations to national political groups.

Reported by NorthJersey.com:

The legislation would broaden the New Jersey conflict of interest restrictions that apply to the pension system to cover national party committees and organizations like the Democratic Governors Association and the Republican Governors Association, an agency that’s being led this year by Governor Christie.

The measure, sponsored by Sen. Shirley Turner, D-Mercer, passed the Senate State Government, Wagering, Tourism and Historic Preservation Committee by a 3-1 vote.

That vote came just weeks after the state Division of Investment, which manages the $80 billion pension system, decided to sell its stake in a venture capital fund with ties to a Massachusetts gubernatorial candidate who donated to the New Jersey GOP. The state Department of Treasury is also in the midst of an internal audit of the investment to determine whether state regulations were violated.

But labor union officials in New Jersey have also questioned other political donations made by investment firms that have been hired by the Division of Investment to manage state pension funds, including several to the Republican National Committee and the Republican Governors Association. Both organizations supported Christie’s successful bid for a second term last year, but are not covered by current state law.

Right now, the Division of Investment regulations bar the agency from investing pension funds in a firm only when the fund management professionals have made contributions to New Jersey candidates and political committees within a two-year period.

Any hint of politics and political favoritism should be kept away from the public employees’ pension funds, Turner said.

“The method of investment should be selected based on performance and merit, not because of campaign contributions,” she said.

The bill would also require the State Investment Council, which oversees the Division of Investment, to provide quarterly reports to the Legislature disclosing the fees being that are paid to the investment management firms. Treasury right now does not list those fees on its website as other states do and requires an Open Public Records Act request, which can be a lengthy process, be filed to obtain the information.

“It’s not their money, nor does it belong to any governor or any other political figure,” Turner said.

The Senate drew up the bill after an uproar caused, at least in part, by a recent series of articles by journalist David Sirota about conflicts of interest within the State Investment Council.

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