New Jersey officials yesterday announced that the state’s cash management fund for its pension systems will invest $700 million in Citi and Merrill Lynch & Co.

The $81.3 billion fund, which invests on behalf of the state’s seven retirement systems, will buy $400 million and $300 million of convertible preferred shares from Citi and Merrill, respectively, according to a statement released by the state’s Division of Investment. The department chose the investments as a way to further tap into the financial services marketplace.

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