It’s never easy launching a new strategy at a new firm, especially when approaching potential allocators.
It can be overwhelming knowing who to call, doing the outreach, and following up.
This is why we wanted to provide some insights on the Public Pension channel that can be a great resource to help launch your strategy.
Pensions have increasingly grown their allocations over the years, and not only help younger firms and managers, but it is really in hope to find future managers they can trust for a long time to come.
So, with that being said, it’s important to have the “road map” on how to navigate these larger pensions with Emerging Manager programs that can be daunting at first glance.
In this case, we would like to provide you the “road map” to the two largest pensions in New York: New York City Comptroller’s Office and New York State Common Fund. Every pension defines an Emerging Manager differently, even within their own program by asset class. So in this article, you will find the following:
Although your strategy might seem like a fit at first glance, it can be a long, grueling process to eventually get the winning ticket. The Due Diligence process can be time consuming and intense, but establishing that relationship and persistence is key.
By the end of this article, you'll have a clear understanding of the New York public pension Emerging Manager programs, as well as their requirements.
The NYC Comptroller Office manages five different pensions for the city (Teacher Retirement System, Employees Retirement System, Police, Fire, and Board of Education), so we are laying out the consultants for each asset class per pension because the boards pick different consultants for different asset classes. Also, each asset class defines emerging manager differently, so this is a good example of not all Emerging Manager programs are created equal.
Opportunistic Fixed Income:
This sleeve is looking at long-biased, alternative credit investment strategies such as direct lending, special situations, distressed, commercial real estate debt and structured credit.
Hedge Funds: Not as large as the other programs but still important to note.
The pension defines emerging managers by stages of their life cycle as a firm, and there is different coverage depending on that stage that we wanted to lay out for you and your firm.
It’s also worth noting that in addition to their Emerging Manager program, they also have a Minority and Women Owned Business Enterprise Program that manages over $20B. The criteria here is pretty much firms that are majority owned by women or minority managers that have established a trackable track record, and have their operations sound. This has been a huge emphasis for New York, and will be moving forward.
Opportunistic & Absolute Return
Now that you know what two major Emerging Manager programs look like, it's time to get started doing outreach and building relationships. At Dakota, this means knowing who to call on, knowing what to say, and having a killer follow up system.
Written By: Steve Aitken, Vice President, Institutional Sales
Steve Aitken is a Vice President of Institutional Sales at Dakota.
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