UNITED STATES - New Jersey state pension fund is scouting institutional partners for infrastructure investment as part of a broader strategy aimed at leveraging critical mass to gain better deal terms.
Under a scheme-wide consortium plan announced last week, it will target potential co-investment partners including other public pension funds and sovereign wealth funds.
Susan Burrows-Farber, chief administrative officer to the $81.3bn (€56bn) scheme, told IPE Real Estate although it was developed around alternatives, the co-investment approach "is a general strategy, not tied to a specific plan". She cited the recent joint acquisitions of significant shareholdings in Merrill Lynch and Citigroup.
"Infrastructure is of interest - but we're not looking at a single consortium. It isn't limited to a single investor," she said. "I can't comment on specific investments but we're interested in anything that will deliver strong returns. Nothing is off the table."
She added: "The investment plan involves a modest rate of increase [in alternatives]. Unlike other plans, we aren't trying to pump up the percentage to 20% or 30% suddenly. The increase will be incremental."
Alternative assets, including infrastructure, made up $7.3bn of the $81.3bn fund at the end of December 2007.
Burrows-Farber said the co-investment move was a result of the increasing ‘professionalisation' of the investment council, which was "guiding the fund in more contemporary directions than traditional pension funds have been. The fund also has a savvy director who thinks it's time to look at it."
In a presentation he gave at a recent Florida hedge fund conference, scheme chairman Orin Kramer - a former hedge fund manager now heading the scheme's voluntary expert panel - referred to a preference for "different classes of investors".
However, Burrows-Farber described as inaccurate press reports suggesting a deal with an overseas sovereign wealth fund is in the offing, although she did not rule out notoriously opaque funds as potential consortium partners - despite an increasing protectionist demands.
"Partnership with sovereign wealth funds, if it's appropriate, will be desirable - not just for the wealth fund but for US companies that don't want to be entirely dependent on a sovereign wealth fund," she said.