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N.J.’s Pension Fund Had Best Return in 12 Years, Grady Says

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July 29 (Bloomberg) -- New Jersey’s pension system gained about 18.5 percent in the fiscal year ended June 30, its best performance in more than 12 years, said Robert E. Grady, chairman of the state’s Investment Council.

The funds, with $74.7 billion in assets as of May 31, underwent a “tactical shift” in their investing about nine months ago that included reducing fixed-income holdings and adding U.S. stocks, Grady said in an interview today with Bloomberg TV at the Rocky Mountain Economic Summit in Jackson Hole, Wyoming.

New Jersey’s pension funds totaled about $67.6 billion as of May 2010, state documents show. At least $2 billion of the fiscal year’s gain was because of the shift in investments, Grady said.

“Specifically we radically lightened up on Treasuries,” Grady said. “We overweighted U.S. equities, and that was a good bet.”

Andy Pratt, a spokesman for the state Treasury Department, said documents showing fiscal-year pension returns won’t be available until September, after an audit.

The importance of the U.S. debt debate for investors is “the prospect over the long term of higher interest rates, potentially higher inflation, and of slower growth in the United States,” said Grady, a partner and managing director of Denver-based private equity firm Cheyenne Capital.

To contact the reporters on this story: Elise Young in Trenton at eyoung30@bloomberg.net; Michael McKee in New York at mmckee@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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