AAA Welcomes New Jersey Pension Funds Decision to go „Alternative‟
The New Jersey State Investment Council has decided to reduce the risk in
the state‟s pension system by investing more money in alternative
Boston, MA, May 27, 2011 -- This news has been welcomed by Alternative
Asset Analysis (AAA), an organization established to assess new
alternative assets and encourage individuals and funds to make more
The pension fund currently has around 17.3 per cent of its investment in
real state, commodities, hedge funds and private equities – all known as
alternative assets. However, after a successful 10-2 vote in favour of a
change in stance, the fund hopes to increase its exposure to these assets
to around 25.5 per cent in the 2012 fiscal year, explained AAA.
The State Investment Council‟s head, Robert Grady, said the decision to
put more cash into alternatives was simply a strategy that it hopes will
reduce risk. He said, "We're trying to maximize risk-adjusted returns.”
However, he stated, the idea is to reduce risk, rather than drive huge
returns. He added, “I don't think it's accurate to say that the [state]
or this council is chasing yield to make up the deficit, which we know
about, in the pension system."
Under the new plan, some 10 per cent of New Jersey‟s pension fund
allocation will go into hedge funds, which will represent a rise of
nearly 100 per cent. Investment in private equity will also be up to 7
per cent from 6.7 per cent.
AAA‟s analysis partner, Anthony Johnson, said that the pension fund‟s
investment strategy is a sound one. “Investing in alternative assets that
are not as affected by wider economic factors to the same extent as
equities is wise for any major fund,” he stated.
AAA supports investment in alternative assets including real estate,
currencies, commodities private equity and forestry. “There are some
excellent returns to be had when investing in environmentally sustainable
projects in emerging markets,“ explained Johnson, who has over ten years
fund management experience.
He continued, “There are several successful sustainable forestry
plantation projects in Brazil that are proving ethical investment can
also be lucrative. Greenwood Management has completed its first round of
selling for its teak plantation trees to individual and groups who have
jumped at the chance to own a tangible, alternative asset that is likely
to rise considerably in value over the coming years.”
Alternative Asset Analysis
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Boston, MA 02109-1320