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NJSIC explores possibilities to unload JLL stake

Since May, the pension fund has performed an evaluation of future expected value of its stake in JLL Partners V and in controversial payday lender ACE Cash Express.

The New Jersey State Investment Council has taken several steps to address controversy over its stake in JLL Partners V, which is invested in ACE Cash Express, a payday lender, according to a spokesperson for the pension fund.

Although it hasn’t yet taken any formal action regarding its investment in JLL Partners yet, it has explored a number of different potential options since its last meeting at the end of May to dispose of New Jersey’s interest in the fund or in the company. NJSIC has also performed an evaluation of the future expected value of its interest in the fund.

“The Division [of Investment] is continuing to explore the various options and will report back to the IPC and SIC as appropriate,” said the spokesperson for the pension fund’s Investment Policy Committee and State Investment Council.

The New Jersey Department of the Treasury’s Division of Investments has also been active on the environmental, social and corporate governance (ESG) front. Its investment consultant has provided the Investment Policy Committee with an overview presentation on socially-responsible investing.

It has also added a section to their due diligence report to the Investment Policy Committee, which details any regulatory issues for the fund manager or for any underlying portfolio companies.

The controversy over the investment began at the May meeting when several advocacy groups expressed concerns related to private equity firm JLL Partners’ investment in a payday lender. 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.

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.

The next New Jersey State Investment Council’s meeting will take place on 23 September, according to its website.