New York City Retirement Systems have increased commitments to minority and women-owned business enterprises, or MWEBs, to nearly $8 billion, or nearly 47% over three years, city Comptroller John Liu said Thursday.
Speaking at his bureau of asset management’s manager conference at the United Federation of Teachers headquarters in lower Manhattan, Liu touted his office’s emerging manager program in private equity, a program designed to directly invest in MWBE-managed funds and emerging funds of up to $750 million.
Liu announced the second investment, of $21 million, in the 2012 private equity emerging managers program in Acon Equity Partners III, an MWBE-managed middle market buyout fund. “Not only have we re-upped with this fund manager, but we have increased our commitment to this fund by eight times our commitment to Fund II,” he said.
“We’ve opened the doors of opportunity and leveled the playing field,” said Liu, whose office oversees a combined $135 billion in assets, making it one of the largest institutional investors nationwide.
The city this week sold $1.3 billion of general obligation bonds, up a fraction from the $1.2 billion expected. The sale included the city’s first offering of floating-rate notes, with two of the tranches led by MWBE firms – Loop Capital Markets LLC and Siebert Brandford Shank & Co. LLC. RBC Capital Markets also led a tranche.
“This was a very successful launch of a new product,” said Liu, who cited broad investor appeal of the GO step-coupon floaters.
New York’s Metropolitan Transportation Authority has also sold the notes over the past year.
Floating rate notes, increasingly popular in the short market, will bear interest at a spread to the weekly Securities Industry and Financial Markets Association index for a predetermined period, from three to five years. At the end of the period, the notes are expected to be refinanced. If not, the interest rates will step up in two stages.
According to a Liu spokesman, strong market demand made it possible to reduce yields by five to six basis points, resulting in a final pricing of 38 basis points over SIMFA for the three-year step-up, 47 over four years and 55 over five years.
Morgan Stanley was book-running senior manager. The city’s GO syndicate also included co-senior managers Bank of America Merrill Lynch, Citi, JPMorgan, Jefferies and Siebert Brandford Shank.