New York City fund looks to diversify; changes investment manager selection process

New York City's pension fund, the NYC Employees' Retirement System Pension Scheme, is planning to increase its exposure to emerging market stock over the next 18 months, according to reports from Reuters.

Larry Schloss, chief investment officer (CIO) of the defined benefit (DB) fund which is worth about $110 billion, told the newswire it plans to raise its stake in emerging market equities from 2% to 7%.

The CIO also said the scheme would be expanding its investments in high-yield bonds and US small caps. A new investment direction for the scheme, into bank loans, will also take place.

The fund is one of the nation's largest after it merged the investment management sections of its five pension schemes (for teachers, police officers, fire-fighters, civil employees and education administrators) in late October, in order to drive down costs, improve decision-making and boost returns.

According to Schloss the fund will soon release more specific details on the new investments.

Reuters reports that as the funds have seen an overhaul of their practices with the new merging of the investment management, they are now no longer limited to just hiring asset managers who respond to specific tenders. It says consultants for the individual funds get to recommend their top managers and the fund then picks the asset managers who get at least three recommendations among the five funds.

azeevalkink@wilmington.co.uk