New York City Comptroller Brad Lander appears to be warming up to alternative investments.
Lander, who is custodian of the $274.7 billion in assets held by New York City’s five public pension funds, recently called for state lawmakers to update a law and increase the amount the city’s pension funds can invest in alternative assets to 35% from 25%. He said that if this could not be done, then the cap on global equities should be raised to 30% from 10%.
Lander recently testified before the state legislature and requested a refresh of the so-called “basket clause.” The basket clause allows up to 25% of a New York public pension fund’s assets to be allocated to investments not otherwise expressly authorized by state law, or that exceed permitted percentage limitations. He said the law “fails to reflect the realities of the modern investment world and hampers our ability to prudently diversify our portfolio, maximize our risk-adjusted returns, and save money in the long term.”
Lander said that “either of these requested legislative changes would allow public pension funds in New York State to prudently diversify their portfolios based on current market conditions and obtain potentially greater returns while maintaining a consistent, prudent level of risk.”
In his speech, Lander pointed out that he is not alone in seeking out higher returns through private investments, as many pension funds and endowments currently invest more than…
