NJSIC considers selling stake in JLL Partners V

Consumer groups’ concerns regarding the fund’s investment in a payday lender prompted the New Jersey State Investment Council to explore various options for dealing with the exposure.

The New Jersey State Investment Council (NJSIC) is exploring options regarding its stake in JLL Partners V after advocacy groups expressed outrage regarding the fund’s investment in ACE Cash Express, a payday lender.

One of its options includes the possibility of selling the stake on the secondary market.

“Several advocacy groups came forward during the time for public comment during yesterday’s SIC meeting to express concern with the state’s investment in JLL, as JLL owns ACE, which the groups described as a ‘payday lender,’” said Christopher Santarelli, deputy director of communications for the New Jersey Treasury Department.

Ace Cash Express makes payday loans, which are loans for small amounts of money that are typically due on the next payday and that carry high interest rates. The cost of a payday loan may range from $10 to $30 for every $100 borrowed, and a typical two-week payday loan with a $15 per $100 fee equates to an annual percentage rate of almost 400 percent, much higher than the rates on credit cards, which range from about 12 to 30 percent, according to information from the Consumer Financial Protection Bureau’s website.

“The SIC thanked the groups for bringing these concerns to their attention,” added Santarelli. He also noted that as a limited partner, the state of New Jersey has no say in JLL Partners’ investment with ACE, but the SIC chair directed its division of investment to explore various options for dealing with this situation and for avoiding future similar situations.

New Jersey committed $50 million in 2005 to JLL Partners V. JLL Partners is a mid-market buyout firm with more than $4 billion under management across six funds. New Jersey also committed $150 million to JLL Partners VI.