1 / 13

Public Pension Funds and Urban Revitalization

Public Pension Funds and Urban Revitalization. December 6 th 2006 Boston, MA Dr. Tessa Hebb, Senior Research Associate Lisa Hagerman, Research Fellow Labor & Worklife Program, Harvard Law School Oxford University Centre for the Environment

rainer
Download Presentation

Public Pension Funds and Urban Revitalization

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Public Pension Funds and Urban Revitalization December 6th 2006 Boston, MA Dr. Tessa Hebb, Senior Research Associate Lisa Hagerman, Research Fellow Labor & Worklife Program, Harvard Law School Oxford University Centre for the Environment Sponsored by the Rockefeller and Ford Foundations

  2. Presentation Overview • Terminology • Best practice findings from pension fund case studies • NYCERS fixed income • CalPERS private equity and real estate • MassPRIM investment selection process

  3. Urban Investment Strategies • Targeted investment in economic development • Types of targeted investment • Private equity • Real estate • Fixed income • Infrastructure • Credit enhancement

  4. Steps in Targeting Investment • Board level champion • Board direction “let’s look at..” • Staff get outside expert study • Boards set broad targets • Select appropriate asset class/amount • Issue targeted investment RFP • Hire top-quartile fund manager

  5. Best Practice in Pension Fund Urban Investment • Success is measured first in risk-adjusted market rates of return • Geographic rather than social targeting • Policy driven by investment philosophy not social targets • RFP deflects political interference • Set broad targets in economic development • Allow top-quartile vehicles to do their job

  6. NYCERS Targeted Policy • Guided by strategic asset allocation policy • 2% across assets - majority to date in fixed income • August 2005 policy asset allocation target: • 6% Fixed Income • 2% Private Equity 2% Real Estate • Geographic target (5 boroughs) and to fill capital gap • Investments programmatic - deflect political interference

  7. CalPERS’ Targeted Investments • Geographic targeting: underserved capital markets • Real estate – CURE Program (1997) ($3.4 b. committed) • Private equity – California Initiative (2000) ($500 m. committed)

  8. Massachusetts PRIM 2003 Targeted Investing Policy • Board champion - State Treasurer • Outside consulting firm completed study • Set 5 criteria for targeted investing • Investment must not exceed a reasonable weighting in portfolio - comply with asset allocation policy • Target capital gap in underserved markets • Social returns will not justify a lower return

  9. Massachusetts PRIM 2006 Targeted Investing RFP • Annual RFP reduces dedicated staff time • Transparent fund manager selection process • Advertised in marketplace • Fund manager demonstrate will invest over 50% of portfolio in Massachusetts

  10. Massachusetts PRIM Manager Selection Process • Search committee evaluates & recommends • Real estate consultant may review • Will investments meet 5 targeted criteria? • Analyze ability to meet benchmarks • Fees • Investment cmte votes (outside experts) • PRIM Board votes with comfort of due diligence

  11. Massachusetts PRIM Current Targeted Investments • $160 million committed • $114 million deployedto date • Real Estate New Boston-USA, Canyon Johnson, Intercontinental • Private Equity Flagship Ventures, Castile Ventures • Fixed Income Access Capital, CRA Fund Advisors • CRA Fund Advisors approved through 2006 RFP

  12. Canyon-Johnson investment in Charlestown, MA

  13. Project website • For more information and case studies: http://urban.ouce.ox.ac.uk

More Related