$1 Billion In Fees for Alternative Investments In NJ Pension

New Jersey, unlike Pennsylvania and other states, has not been filing public reports listing fees paid to its private investment management contractors who invest billions for the state pension system. To obtain this interesting and useful information, Joseph N. DiStefano at philly.com made a request in July under the state Open and Public Records Act for all fees paid those managers for 2008-13 and he got a story out of it which included a spreadsheet that got more interesting once it was put into EXCEL format that showed:

  • Lone Star Fund VII (U.S.) LP with a value of $108,631,903 is listed twice
  • Northwood Real Estate Co-Invest with a value of $19,461,382 might be counted twice too since two listings are identical except for the different fee amounts
  • Wheelock SREF NJ CO-Invest Feedcost $26,305 and is worth $0 now after $26,305 in fees
  • JPMorgan Direct VC Institutional paid almost as much in fees ($1,148,125) as it cost, repaid, and is currently valued at ($1,228,762) though there is a second listing for the fund bought in the same year with much higher values
  • General Catalyst Group VI, L.P. (the Charlie Baker investment) was reportedly bought at $9,675,000 and was valued as of 2013 at $13,854,995 with total fees of $677,250

Here is the EXCEL file for your browsing pleasure and comments with separate spreadsheets showing:

  1. alphabetical listing of all alternative investments
  2. investments still active by annualized rate of return
  3. investments still active by annualized expense ratio
  4. closed investments



23 responses to this post.

  1. Posted by RealRep on November 4, 2014 at 4:41 pm

    Carpet bombing.


  2. Posted by Anonymous on November 4, 2014 at 9:23 pm

    It’s beneficial to have the NJ Governor as a friend. I hope the union lawyers find evidence to support the ethics case.


  3. Posted by Anonymous on November 5, 2014 at 8:41 am

    The billionaires won the midterm, so corporate America can relax, no oversight.


    • Posted by Anonymous on November 6, 2014 at 6:41 pm

      Today Thurday, Nov 6, 2014, the Star Ledger reported CC had a meeting with billionaires. I guess TO get further instructions to implement their wealth increase plan with their favorite political puppet.


  4. Posted by hondo on November 5, 2014 at 10:52 am

    Everybody blames us for shortfall but, taxpayers will have to foot that bill also! Public/private doesn’t matter.


  5. Posted by Javagold on November 5, 2014 at 11:21 pm

    Ha. you public takers have been taken to the cleaners. That retirement is going to be a little tougher than you dreamt of.
    Welcome to Wal Mart.
    Would you like to super size the fries ?


    • Posted by Tough Love on November 7, 2014 at 8:43 am

      The BEST part of Republican control of BOTH houses of Congress is that a FEDERAL bailout of a StaTe or City that becomes insolvent due to grossly excessive pension & benefit promises is ON THEIR OWN ….. not a snowball’s chance in hell will there be a FEDERAL bailout.


      • Posted by Anonymous on November 7, 2014 at 2:45 pm

        No they will increase the defense budget to benefit their wealthy campaign donors whose wealth is tied to war products and services. TL do you have a son or daughter to sacrifice to the war machine., they like poor and middle-class enlistees.


        • Posted by Tough Love on November 7, 2014 at 4:03 pm

          We do need to reform (i.e., reduce) defense spending.

          But do you think the need to address OTHER important issues diminishes the need to VERY materially reduce (by 50+%) the grossly excessive pensions and benefits granted ALL Public Sector workers ?

          Let me answer that for you ……. NO !


          • Posted by Anonymous on November 7, 2014 at 6:07 pm

            For at least the next two years the possibility of escalating US presence on different battlefields is strong. The Republicans must “restore” America’s dominance on the world stage through the military, even though it was Wall St greed/arrogance that destroyed US credibility worldwide.

  6. Posted by Anonymous on November 6, 2014 at 1:17 am

    What are you talking about, the NJ pension cans have been kicked to the next Governor. Wal-Mart sells many varieties of frozen fries, maybe you meant McDonald’s, I haven’t noticed senior door greeters in years. The NJ Constitution would need changing to eliminate public pensions, CC and company are all in PERS, ACTS and DROP, you think they will undo their pensions?


    • Posted by Tough Love on November 6, 2014 at 7:53 am

      Anon, You haven’t beeen paying attention. Nj’s State Plans will run out of money in 3-5 years….. meaning that continued payment of pensions (under “pay-go”) requires either a $5-8 Billion rax increase or pension reductions.

      Not even your beloved Democrats will raise taxes by anywhere near that much, so pensions cuts (or altermatively a massive reduction in retiree
      healthcare subsidies) is inevitable….. and well-deserved due to the insatiable greed of Public Sector workers.


      • Posted by Anonymous on November 6, 2014 at 6:33 pm

        TL,you can believe as you wish, NJ public employee pension funds will be reformed and employees will receive pensions. The State might only provide health benefits to employees. The employees will pay most of the premium, spouse/family benefits from Obamacare. It’s a tangled web but it keeps life interesting.


        • Posted by Anonymous on November 6, 2014 at 9:39 pm

          Sounds like a good plan to me


        • Posted by Tough Love on November 7, 2014 at 2:57 am

          I like that idea. First we take away the retiree healthcare, and THEN, when it becomes obvious that then pensions are STILL massively underfunded and WAY too generous, we cut the pensions in half.

          That’s a “plan” I look forward to.


    • Anon, pensions are not protected under the NJ constitution, they are not protected by any constitutional laws in NJ. Politicians can do whatever they want as they see fit. Also, Christie and the other cronies, D and R, are so rich already that their pensions would be pocket change. Best to be prepared as reforms, reductions, higher employee contributions are coming your way.


  7. Posted by Anonymous on November 6, 2014 at 12:13 pm

    Then Christie and company use their supplemental retirement accounts for tax deferral purposes. All public employees are eligible to participate in pretax supplemental defined contribution programs sponsored by the State of NJ. If the colas are about to be restored by the courts based on rights, why wouldn’t the pension the colas are based on also be protected. The health benefits are not protected.


  8. Posted by Anonymous on November 7, 2014 at 9:57 am

    Pension payout, early withdrawal and defaulted pension loans are taxed, funds in the accumulation phase are not. Retirement monies in accumulation are pretax, tax deferred, they decrease the present income tax burden. Many public employees are unaware of the benefit realized by participating in the State sponsored supplemental retirement plans. The deferred monies are held by the designated provider not the State pension.


  9. […] New Jersey pensioners.  Look at a list of alternative investments in the Division of Investments portfolio last year and you find on line […]


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