New private equity head for New York Teachers

The New York State Teachers’ Retirement System has restructured its internal investment team creating a new role of head of private equity, to create five direct investment reports to the executive director, and has already made a number of additional investments in that asset class.

The $72 billion fund has a long-term asset allocation to private equity of 7 per cent and has more than 120 limited partnership mandates.

At its January board meeting it also approved investments of up to $65 million in Sterling Group Partners III and $25 million in Wynnchurch Capital Partners III. The consulting relationship with Stepstone Group, for private equity, has also been renewed for one year from February.

Private equity manager, Dhvani Shah, will take up the new position of managing director of private equity within the system’s investment department.

Previously this responsibility sat with the managing director of external asset management/corporate governance, Lawrence Johansen . Other heads of departments within the investment team, which report to the executive director, Thomas Lee, include managing director of real estate, managing director of quantitative strategies/risk management, and the managing director of fixed income.

Meanwhile the board also approved Lee to reallocate on a quarterly basis up to $150 million in assets from the actively managed domestic equity portfolios to the fund’s passively managed domestic equity portfolios, or its cash flow accounts, provided the amounts to be reallocated do not exceed 25 per cent of the assets under active management at the time of the reallocation.

Under the fund’s investment policy it is possible for 100 per cent of the domestic equities portfolio to be passively managed.

NYSTRS target asset allocation June 2009

US equities 43%

International equities 15%

Real estate 10%

Private equity 7%

US fixed income 18%

Mortgages 8%

Cash 0%