The New Jersey Division of Investment has hired Cogent Partners to sell a large chunk of private equity funds on the secondaries market, an offering that will allow the system to better manage its portfolio.
The total offering is valued at more than $1 billion and includes a mix of mega-buyout and growth funds, according to a person with knowledge of the situation.
Individual stakes have so far attracted prices at or near par, sources tell Private Equity International, building expectation that the larger offering will garner prices near par.
Cogent declined to comment. New Jersey confirmed the hiring but declined to comment further.
The sale will help New Jersey make some room for new commitments. The system has a 6.7 percent actual allocation to the asset, and the State Investment Council, which oversees the pension’s investments, last month increased the cap to 12 percent, with a target of 7 percent. A secondaries sale will help the pension reduce its actual allocation and make room for new relationships.
The State Investment Council approved procedures for the sale in March, at which time Tim Walsh, chief investment officer at the pension, said New Jersey would work to identify 15 to 20 funds to sell. The pension is not a “distressed seller”, Walsh said, but would be “opportunistic”.
“Prices in these investments have come up to levels where it’s time to either take profits or move on,” he said. The pension would like to use the secondaries market to cull some of the managers from its $4.6 billion portfolio who it is not likely to re-up with, Walsh said at the time.
Several US public pensions have turned to the private equity secondaries market to manage their portfolios, including public institutions in Ohio, New Mexico, California and North Carolina. Last month, the New York City Retirement System issued a request for proposals for a broker to run a private equity and possibly real estate secondaries sale.