NJ DOI considers $500m StepStone infrastructure account

TL/DR -

The New Jersey Division of Investment is planning to establish a $500m separate account with the StepStone Group, focusing on investments in infrastructure and energy transition sectors. The pension fund may also seek partnerships, secondary investments, and selective primary funds, primarily in North America, with potential expansion to the UK, Western Europe, Asia, and select OECD countries. Additionally, it is also considering a $150m commitment to KSL Capital Partners Tactical Opportunities Fund II, a real estate fund aiming to raise $1bn to invest globally in credit, debt securities, equity, and equity-linked securities.

New Jersey Investment Division Considers $500m Account with StepStone Group

New Jersey Division of Investment is pondering a $500m separate account setup with StepStone Group. This move targets investment opportunities in the infrastructure and energy transition markets.

As per the meeting documentation, this investment would grant the pension fund a 99% ownership stake in the separate account. This arrangement also includes an annual option to boost the commitment. StepStone is anticipated to invest $5m from its capital for a 1% stake in the partnership.

New Jersey Division of Investment reveals that the initial focus of the separate account will be co-investing in infrastructure projects. Other potential investment avenues include partnerships, secondary investments, and selective primary funds.

Investment targets span primarily across North America, with possible extension to the UK, Western Europe, Asia, and selected OECD nations. The aim is to attain a minimum of 10% net return.

Currently, the pension fund's allocation to infrastructure and energy transition investments is under its target.

Additionally, a $150m commitment is being considered to KSL Capital Partners Tactical Opportunities Fund II. This real estate fund is set to raise $1bn for global investment in credit, debt securities, equity, and equity-linked securities.

KSL Capital Partners' investments mainly target US hotels and resorts, projecting a 13% to 15% internal rate of returns.

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