NYC pension eyes hedge funds

NEW YORK (Reuters) - New York City is exploring putting some of its pension fund of more than $100 billion (64 billion pounds) into U.S. infrastructure funds and whether this is "a good time" to invest in hedge funds, Comptroller William Thompson said on Friday.

One impetus for considering such stakes now is the losses seen in the shares of companies the fund owns, the Democratic comptroller said in an interview on CNBC television.

"New York City -- obviously we're going to have to ride this out," he said, explaining it now made sense to look at other investments.

About 44 percent of the pension funds now are invested in U.S. equities, 29 percent in fixed income, and 18 percent in international equities. Private equity and real estate accounts for 7 percent and there each of two categories has 1 percent: cash and a so-called opportunistic category.

Thompson, one of the chief overseers for the pension fund, offered no details about what specific infrastructure funds he might select.

He said a stake in a Northern Ireland infrastructure fund had shown "growth potential" and added: "Here in the United States, we are looking at domestic infrastructure funds as well...another area where perhaps we will see great demand."

U.S. states, counties and cities are battling to find the money to expand highways, bridges, subways and bus systems as they suffer decreases in federal government aid and in gasoline tax revenues.

Banks and private companies around the nation, eager for stable investments, have raised hundreds of millions of dollars for this asset class.

Texas, which has one of the nation's biggest road privatization plans at $150 billion, was one of the first states to propose investing pension funds in infrastructure.

New York Gov David Paterson is looking into leasing state assets, like the Thruway or the lottery, or replacing the Tappan Zee bridge with a public-private venture.

New York City, unlike some other public pension funds, was not particularly invested in hedge funds, many of which have turned in sorry results this year. "Now we're looking at some very conservative strategies...perhaps this is a good time to get in," Thompson added.

A newly desirable instrument now is cash, though the city's pension fund cannot now make much of a switch to this security blanket.

"We can't really convert that much into cash," Thompson said.

(Reporting by Joan Gralla; Editing by Chizu Nomiyama)