Grady to take helm at $68bn New Jersey pension as advisor prompts alternatives hike

Former Carlyle partner Robert Grady is poised to be elected chair of the state’s investment council as the pension’s advisor Strategic Investment Solutions’ advice to hike alternatives up to 38 percent becomes draft regulation.

The New Jersey State Investment Council, the council charged with making investment decisions on behalf of the state’s $68.1 billion pension fund, is poised to elect Robert Grady as its next chairman, replacing outgoing Orin Kramer.

According to a report by Bloomberg, Grady, a former partner at The Carlyle Group with experience of sourcing deals in Europe and Asia, will join from Denver-based investment firm Cheyne Capital

The pension fund’s latest report states it committed $310 million to real estate and private equity funds in July. Such commitments could well increase under Grady’s leadership after retained advisor Strategic Investment Solutions recommended to the investment council at a meeting held yesterday to increase its allocation to alternative investments as a way of boosting returns and protecting against losses from stock market investments.

Its recommendation was to increase the pension fund’s exposure to alternative investments from 28 percent currently to 43 percent, Bloomberg reported, however the Investment Council agreed an increase of up to 38 percent and drew up draft regulation to that effect.

Kramer, whose term expired this week, said at the meeting the pension fund would not definitely reach its allocation allowance, moreover, the increase would provide it with the flexibility to do so if required.

The state investment council manages capital on behalf of seven pension plans providing benefits to approximately 800,000 teachers, police officers and government employees.