New York ploughs $150m into PPIP funds

Two fund managers raising capital as part of the US government’s PPIP programme have secured $150 million from the New York State Common Retirement Fund.

The $126 billion public pension fund said it was investing $100 million in Invesco’s Mortgage Recovery Feeder Fund and $50 million in Oaktree Capital Management’s PPIP Private Fund.

New York State Common set aside $200 million for investments with PPIP managers last November as a means of targeting distressed mortgage-backed securities as well as being “constructive in the economy”, according to a spokesman.

This is the first time New York has invested with Invesco, the pension said in a statement. No placement agents were used for either commitment, which closed on 10 and 18 December, respectively.

The pension also said it committed $160 million to four private equity funds, including a $100 million follow-on investment with Hong Kong-based private equity firm SAIF Partners’ Fund IV. The pension committed $30 million and $25 million respectively to emerging manager funds Relativity Fund and Bunker Hill Capital II. A further $5 million was committed to Clearlake Capital Partners II.

The US Treasury selected nine managers to take part in its Public-Private Investment Program (PPIP) in August 2009, including Oaktree; Invesco; Angelo Gordon and GE; AllianceBernstein and sub-advisors Greenfield Partners and Rialto Capital Management; BlackRock; RLJ Western Asset Management; Wellington Management and The TCW Group.

TCW was forced to quit the programme and liquidate its $500 million fund following the departure of its former chief investment officer Jeffrey Gundlach.

Oaktree was the final PPIP manager to hold a first close on its PPIP vehicle on 18 December, raising an estimated $400 million in private capital, according to people familiar with the matter. Managers were initially given 12 weeks to raise a minimum of $500 million.