* Experience sought in PE, real assets, hedge funds
* Responsibilities include sourcing, due diligence
* NJ may add more separate accounts
By Sam Sutton
NEW YORK, July 8 (Reuters-BUYOUTS)- The New Jersey Division
of Investment plans to hire up to three senior investment
professionals for its alternative investments team, and may hire
money managers to run additional separate accounts, Director
Chris McDonough told Reuters Buyouts Magazine.
The professionals would be tasked with helping to manage the
$79 billion pension system's private equity, real estate, real
assets and hedge fund portfolios. Duties include sourcing
investments, performing manager due diligence, negotiating
partnership agreements, managing relationships with outside
consultants and presenting recommendations to the New Jersey
State Investment Council, according to a job description.
"We encourage people to work across asset classes,"
McDonough said, adding that he expects to hire the new senior
investment professionals by late September.
McDonough first told Buyouts Magazine of his general plan to
expand the pension system's alternative investments team in
March, shortly after being named director. He had served as New
Jersey's acting director since September, when former Director
and Chief Investment Officer Timothy Walsh left to take over the
North American operations of real estate firm Gaw Capital.
New Jersey Division of Investment had committed roughly $12
billion to private equity funds through the end of April,
according to a recent report. Its holdings in buyout and venture
capital strategies were valued at $5.78 billion as of April 30,
equal to just over 7 percent of its total investment portfolio
and slightly above its 7 percent target allocation to private
equity. Holdings in debt-related private equity strategies were
valued at $795 million, or 1 percent of its total portfolio,
below the pension system's 1.25 percent target allocation.
The private equity portfolio (including debt-related
investments) has generated a five-year return of 15.75 percent
annually for the retirement system, according to the report. The
alternatives portfolio, which groups private equity alongside
real estate, real assets and hedge fund strategies, had
generated 10.64 percent return over the same time.
In May, the state authorized a $100 million commitment to
Warburg Pincus Energy Fund and $50 million to MHR Fund
Management's fourth distressed debt vehicle.
In addition to its commitments to traditional private equity
vehicles, New Jersey also maintains separately managed accounts
with The Blackstone Group and Och-Ziff Capital Management. Those
multi-strategy accounts, which carry discounted management fees,
allow the pension system to invest across real estate, credit,
hedge and private equity funds.
McDonough said that New Jersey may consider additional
separate accounts after the pension system finishes bringing on
new investment staff.
"We will consider doing another, or another two, if the
opportunity presents itself, but expanding the staff is
something we want to focus on right now," McDonough said.
New Jersey's senior alternative investment team is staffed
by Jason MacDonald, Maneck Kotwal and Lou Kish, according to a
contact sheet available through the New Jersey Division of
New Jersey will be accepting applications for the new
positions through the end of July.
(Buyouts Magazine is a Thomson Reuters publication. Editor: