N.J. Admin. Code § 17:16-69.9

Current through Register Vol. 56, No. 24, December 18, 2024

Section 17:16-69.9 - Limitations

(a) For all investments made by or on behalf of any Common Pension Fund through direct investments, separate accounts, funds-of-funds, commingled funds, co-investments, or joint ventures under N.J.A.C. 17:16-23.2(a)2, 71.2(a)1, 90.2(a)1, and 100.2(a)1, the following shall occur:

1. The Director shall provide the Investment Policy Committee of the Council (Investment Committee) with the requested due diligence information for all investments recommended by the Division and a formal written report for each such investment. Due diligence information shall include but not be limited to, in all cases, information demonstrating that the investment satisfies the limitations and conditions contained in N.J.A.C. 17:16-23, 71, 90, and 100, and a written disclosure submitted by the asset manager summarizing any and all compensation arrangements with consultants and intermediaries, whether direct or indirect, in connection with the proposed investment.

2. The Director shall provide an informational memorandum to the Council on each binding commitment, which memorandum shall be provided at the first regularly scheduled meeting of the Council subsequent to the date such binding commitment has been made.

3. On investments of less than $ 50 million, the Director shall provide an informational memorandum to the Council on each such investment made, which memorandum shall be provided no later than the first regularly scheduled meeting of the Council after the date such binding commitment has been made.

4. In any given calendar year, and at any point within such year, at least 80 percent of the number of investments and 80 percent of the dollar amount of total investment commitments must be eligible for a report by the Investment Committee to the Council. For investments under $ 50 million, so long as such investments constitute no more than 20 percent of the number of investments approved and 20 percent of the total investment dollars committed, the Director shall provide an informational memorandum to the Council pursuant to (a)3 above. Once the Division has exceeded its 20 percent "exemption" in any given year, all proposed investments will be subject to the Investment Committee providing a report to the Council until the number and dollar value of "exempt" investment again falls below the 20 percent threshold.

(b) Not more than five percent of the market value of the assets invested through direct investments, separate accounts, funds-of-funds, commingled funds, co-investments, and joint ventures pursuant to N.J.A.C. 17:16-23.2(a)2, 71.2(a)1, 90.2(a)1, and 100.2(a)1, plus outstanding commitments, may be committed to any one partnership or investment, without the prior written approval of the Council. This limitation shall be applied to the Pension and Annuity Funds' proportionate interest in the investments.

(c) A binding commitment shall not be made directly with an investment manager that, together with all other direct commitments made with the investment manager pursuant to N.J.A.C. 17:16-23.2(a) 2, 71.2(a)1, 90.2(a)1, and 100.2(a)1, comprises more than 20 percent of the investment manager's total assets under management at the time of such binding commitment. Notwithstanding this subsection, a binding commitment may be made that exceeds the 20 percent limitation, provided that any obligation to fund the commitment shall be contingent upon the total amount invested directly with the investment manager (excluding unfunded commitments) being less than 20 percent of the investment manager's total assets under management (excluding unfunded commitments) at the time of funding.

(d) Not more than 45 percent of the market value of the assets of any fund under the supervision of the Council shall be represented by the market value of investments as permitted by N.J.A.C. 17:16-23.2(a)2, 71.2(a)1, 90.2(a)1, and 100.2(a)1, whether held directly by such fund or through the Common Pension Funds. If the market value exceeds 45 percent, then the Council shall be notified at the next regularly scheduled meeting of the Council. The Division may be granted a six-month period of grace to reduce the level of participation of the fund below the 45 percent level, except that the period of grace may be extended for additional four-month periods with the approval of the Council.

(e) Unless otherwise specifically provided therein, in the event that any subchapter contains a limitation on the percentage of assets of any Pension and Annuity Fund which may be invested in an investment or class of investments, that limitation shall be construed to apply to the percentage of combined assets of all of the Pension and Annuity Funds participating in a Common Pension Fund and shall not restrict the total investment by that Common Pension Fund in such investment or class of investments to the percentage limitations applicable to any individual Pension and Annuity Fund.

(f) Unless otherwise specifically provided therein, in the event that any subchapter contains a limitation on the percentage of an investment or class of investment in which the Director may invest, that limitation shall be construed to exclude investments made through separate accounts, funds-of-funds, commingled funds, co-investments, and joint ventures pursuant to N.J.A.C. 17:16-23, 71, 90, and 100 on behalf of the Common Pension Funds.

N.J. Admin. Code § 17:16-69.9

Amended by 51 N.J.R. 1130(b), effective 7/1/2019

Amended by 52 N.J.R. 1338(b), effective 7/6/2020

Amended by 53 N.J.R. 1857(a), effective 11/1/2021