The $81 billion New Jersey Investment Council is looking to commit a total of $6 billion to private equity, real estate and hedge funds by June, FINalternatives has learned.
In an internal memo to the state’s investment council, investment director William Clark is recommending a total of $1.7 billion be invested directly into hedge funds, with 24% allocated to long/short funds, 21% to distressed strategies, 21% to multi-strategy funds, 19% to credit strategies and 15% to event-driven funds.
A further $250 million has been committed to funds of hedge funds, and the council is seeking further exposure to activist and emerging hedge fund managers. Clark wrote, “Most academic studies support the contention that smaller, less established hedge funds tend to generate superior returns.”
The fund’s hedge fund portfolio last year gained an estimated 11.9% specifically on the strength of its fund of hedge funds portfolio managed specifically by Goldman Sachs and Protégé Partners and its direct hedge fund investment in Archipelago Partners managed by Wellington Management.
On the p.e. front, Clark recommends making larger commitments to general partnerships while reducing the number of its exposure that “may reduce investment returns.” The fund is also looking to rev up its exposure to alternative energy private equity funds to the tune of $100 to $200 million.
Clark last week the fund may team up with p.e. firms, sovereign wealth funds and other institutional investors on new deals and invest in p.e. firms directly.
The fund’s total investment in alternatives is $7.6 billion, or 9.38% of the total portfolio as of the end of December.