NYC Teachers Fund Said to Pick Hamilton Lane as Private Equity Consultant
New York City’s $37 billion pension fund for schoolteachers plans to hire Hamilton Lane Advisors as a consultant as it reevaluates its private-equity investments, according to a person briefed on the decision.
Teachers’ Retirement System of the City of New York, which oversaw $2.5 billion in alternative investments as of April 30, selected the Bala Cynwyd, Pennsylvania-based firm over two other contenders, said the person, who declined to be identified because the decision isn’t public.
Lawrence Schloss, the founder of private-equity firm Diamond Castle Holdings LLC who was hired in January to help oversee about $100 billion for the city’s five public pension funds, said he would review the funds’ investments including private equity. Schloss worked with Hamilton Lane Chairman Hartley Rogers at Credit Suisse Group AG’s private-equity unit before founding his own firm.
“I know hundreds of professionals in the private-equity business so I’d like to think I can utilize them for due diligence,” Schloss said at a June 23 investment conference in Manhattan.
Diamond Castle Holdings and Hamilton Lane were among five firms that invested $2 billion in Tygris Commercial Finance Group Inc., a lender formed in 2008, according to Diamond Castle’s website.
The city’s pension funds are all currently advised by La Jolla, California-based PCG Asset Management LLC, according to the person. PCG will continue to advise the other four systems. Cliffwater LLC in Newport Beach, California, was among firms vying for the consulting job after the teachers’ fund solicited proposals, according to the person.
Sharon Lee, a spokeswoman for the city comptroller’s office, declined to comment. Meghan Houlihan, spokeswoman for PCG, and Stephen Nesbitt, chief executive officer of Cliffwater, didn’t respond to requests for comment. A Hamilton Lane spokesman couldn’t be reached.
Schloss, 55, was hired by city Comptroller John Liu in January. Before forming Diamond Castle in 2004, Schloss headed DLJ Merchant Banking, an alternative-asset investment business whose parent was acquired by Zurich-based Credit Suisse in 2000.
New York “got very aggressive with private equity” in 2007 and 2008, Schloss said at last month’s conference. The five systems have allocated $6.8 billion to 166 managers, according to Schloss.
“We seem to have more than our share of relationships,” he said. “We can probably use some trimming of our relationships over time.”
The teachers’ fund has more than 182,000 members, retirees and beneficiaries, according to its website.