The New York State Common Retirement Fund has allocated $300 million to Artemis Real Estate Partners, according to an announcement by State Comptroller Thomas DiNapoli. The commitment to the Chevy Chase, Maryland-based real estate fund manager is the $146.9 billion pension plan's initial investment in a new emerging manager component of its real estate portfolio.
In forming a separate account with Artemis, NY Common has completed an initiative – set forth by DiNapoli when he took office in 2007 – to launch an emerging manager programme in each of the pension’s major asset classes. “With the emerging manager programme now in place across our asset classes, NY Common has affirmed its status as an innovator in the field and shown once again its commitment to enhancing diversity and opportunity while improving its bottom line,” he said in a statement.
The objective of the real estate emerging manager vehicle is to provide NY Common with access to real estate operators that have less than $1 billion of equity capital under management. Using the separate account, Artemis will seek to deliver enhanced core returns by making and managing equity and debt investments with qualified emerging managers. The program will have a sensitivity to minority- and women-owned business enterprises (MWBEs).
“We are excited to execute this strategic mandate to create joint venture partnerships with established and newly formed emerging managers,” said Deborah Harmon, co-founder and chief executive officer of Artemis, in a statement. “Our efforts will reflect Comptroller DiNapoli’s commitment to identifying and increasing opportunities for these managers.”
In 2007, DiNapoli made a commitment to create emerging manager programmes in each major asset class of NY Common, beginning with the private equity asset class. The pension plan announced the selection of managers for that programme in January 2009, and the hedge fund emerging manager programme was announced in June 2010. The pension plan’s emerging manager programme in public equities began in 1994, preceded by a long-standing fixed income emerging manager programme.
NY Common currently invests $6 billion with emerging managers. The goal of the emerging manager programme is to invest assets with smaller, newer funds and separate account managers, with a focus on MWBEs. Emerging managers invest in different structures and markets than larger firms and provide diversification for the pension plan’s portfolio.
Artemis recently was featured in PERE in an article highlighting 10 emerging real estate fund managers to look out for. Formed in 2009 by Harmon and chairman Penny Pritzker, the firm specialises in a variety of real estate strategies, primarily distressed properties and debt. Another aspect of the firm’s strategy is that its co-founders and principals invest significant capital alongside its investors.