An influential private equity real estate leader at a US public pension system has stepped down.
Christine Pastore, the outspoken co-head of alternative investments, which included private equity and real estate, at New Jersey’s $70 billion state pension system, has resigned. New Jersey’s State Investment Council announced the move Thursday, though Pastore actually resigned in January. Her last day is 30 March.
“You just know when it’s time,” Pastore told sister publication Private Equity International, describing the decision to leave the system as a tough one. “I was ready.”
It’s not clear if New Jersey will initiate a search to replace Pastore. A spokesperson did not respond to a request for comment Friday.
“Christine … has performed a great service for the beneficiaries of the pension system. We will miss her,” said chairman of the State’s Investment Council Robert Grady. The system’s chief investment officer Tim Walsh added: “Christine will be sorely missed; she has great judgment, the respect of myself and the respect of the State Investment Council.”
Pastore joined the state’s Division of Investment in 2005 as the head of the system’s brand new private equity programme. She was instrumental in building New Jersey’s pension system into one of the influential limited partners in the market. The system followed a brisk commitment pace for the first few years after the launch of the programme, forming relationships with top groups like Warburg Pincus, The Blackstone Group and TPG.
The system pulled back its alternatives programme in 2009 as it became slightly over-weighted to the asset class when the public markets declined in the financial crisis. After the appointment of a new chief investment officer, Timothy Walsh, Pastore was promoted to co-head of alternative investments, which included real estate, in 2010.The system resumed private equity activity in late 2010, making its first commitment in nearly two years to Tenex Capital Partners, a spin out from Cerberus Capital Management.
Under Pastore’s watch, the system’s private equity programme expanded to include about $9.5 billion in total commitments, with about $3.2 billion of that uncalled, as of February.
Outside of traditional commitments, Pastore helped guide the programme into some innovative areas of the asset class, including its first-ever major, structured secondaries sale – a process run by Cogent Partners and led by senior portfolio manager Jason MacDonald. New Jersey sold more than $600 million of its portfolio to consolidate its relationships and make room for future funds.
And as a curtain call, Pastore, who spent 22 years working in various capacities in the public sector, helped craft an innovative “strategic relationship” with Blackstone that came with choice economic terms and allows the pension system to get exposure across asset classes. New Jersey’s strategic relationship with Blackstone is one of the first in what is expected to be an ongoing movement in the industry of big institutions forming more tailored partnerships with big firms.
Pastore leaves a robust legacy, having formed many strong relationships with managers.
“She is terrific – as an investor and as a person. She is a thoughtful and astute investor and very dedicated to the State of New Jersey,” said Maryfrances Metrick, senior managing director with Centerbridge Partners, a firm to which the pension system has committed capital. “Her’s are very big shoes to fill. I know whatever she does next; she will again be highly successful.”
New Jersey is left to figure out how to replace Pastore. While internal promotions could help fill the role, the system may have a tough time hiring a senior head of the programme because of compensation issues. US public systems offer pay packages that are usually much lower than those in the private sector.
The stark contrast in compensation levels – along with the prospect of dealing with political issues common in public systems – has led to a “brain drain” among private equity heads at public systems, sources have told Private Equity International.
News of Pastore leaving her post soon follows the recent announcement that Charles Haase, real estate investment officer at the California State Teachers’ Retirement System, has resigned from his post at the pension plan and has accepted a new position as advisor on global strategy with Tokyu Livable, a commercial real estate services firm in Tokyo.
Pastore, however, is in no rush to choose her next step. After taking some time off, Pastore said she will start the job hunt. She said she hopes to stay in the industry. “This is what I do best,” she said.