New York City Comptroller Scott Stringer hired Greenhill Cogent last month to advise the New York City pension on the sale of some private equity fund stakes, according to a spokesperson for the NYC comptroller.
The story was first reported by PE Hub.
“In May, the Comptroller’s Office entered into a contract with Greenhill Cogent to be a long-term advisor to the New York City Pension Funds and the Bureau of Asset Management,” said the spokesperson.
“New York City is looking to use the secondary market as a portfolio management tool. We will be opportunistic about the buying and selling of private equity limited partnership interests.”
Greenhill Cogent declined to comment.
Stringer released an analysis in April showing that high fees and failures to hit performance objectives with some money managers, including private equity managers, have cost the pension system some $2.5 billion in lost value over the past decade.
“We need to demand more value from Wall Street when they invest the hard-earned pension dollars of our workers, because right now money managers are being paid exorbitant fees even when they fail to meet baseline targets,” Stringer said in a press release at the time.
“When you do the math on what we pay Wall Street to actively manage our funds, it’s shocking to realize that fees have not only wiped out any benefit to the funds, but have in fact cost taxpayers billions of dollars in lost returns. It’s clear that the status quo needs to change.”
The report noted that managers of private asset classes such as private equity, hedge funds and real estate fell $2.6 billion short of target benchmarks after fees.
The New York City Retirement System has a total of $160 billion under management and is the fourth largest pension fund in the nation. It currently has a 6.16 percent allocation to private equity, according to data from PEI Research and Analytics.
The system is made up of five pension funds: the New York City Police Pension Fund, the New York City Fire Department Pension Fund, the Teachers Retirement System of the City of New York, the New York City’s Employees’ Retirement and the Board of Education Retirement System.
This isn’t the first time the New York City Retirement System is active on the secondary market. In January 2012, it hired UBS to run the sale of about $750 million of private equity holdings, according to previous reporting from Secondaries Investor.