New York pension fund to invest up to $5.4B in Africa

Vicki Fuller, Chief Investment Officer, New York State Common Retirement Fund

The New York State Common Retirement Fund, one of the largest U.S. Pension funds and worth about $180 billion, plans to invest as much as 3% of its assets in Africa in the next five years to diversify its portfolio and boost returns. The figure would be more than $5 billion based on the fund’s current valuation.

African private equity firms, venture capital, real estate, and new infrastructure projects such as power plants are likely to receive funding, said Chief Investment Officer Vicki Fuller.

The New York pension fund has so far invested about $200 million in Africa, most of which was committed in the last 12 months to two private-equity firms: Helios Investment Partners and African Capital Alliance. The fund will prioritize local managers with offices in African nations, Ms. Fuller said.

“I want to invest in the people who are local, understand the culture, understand on a very granular basis what’s happening,” Ms. Fuller said at a conference in London organized by the African Private Equity and Venture Capital Association.

The fund will write checks of about $100 million for funds bigger than $500 million and invest in smaller firms and new funds through a fund of funds manager rather than directly.

The New York pension manager is also prepared to team up with sovereign wealth funds and other pension funds to invest in African infrastructure projects.

In response to a question about how to encourage more American public pension funds to invest in Africa, Ms. Fuller said it was important to brief trustees and overseers, such as New York State comptroller Thomas P. DiNapoli.

“His only concerns are that we invest in countries that treat their citizens well. Now, on a given day, that’s not even the case in the U.S.,” Ms. Fuller said. “But you know that the law is on the side of the citizenry in the U.S.”

Africa is at the beginning of a process of being discovered by many major American investors, as was the case for Asia a few decades ago, Ms. Fuller said.

“It took many years before investors really were on a wholehearted basis going into Asia, particularly China,” she said.

Source: New York Pension Fund to Invest Billions in Africa – WSJ.