N.J. Admin. Code § 17:4A-1.4

Current through Register Vol. 56, No. 23, December 2, 2024

Section 17:4A-1.4 - Limitations

(a) For all investments in direct investments, separate accounts, funds-of-funds, commingled funds, co-investment, and joint ventures, the investment committee shall receive a written due diligence report which shall contain, among other things:

1. Sufficient evidence to demonstrate that the proposed investment satisfies the applicable limitations and conditions set forth in this chapter; and

2. A summary of any and all compensation arrangements with consultants and intermediaries (whether direct or indirect) in connection with the proposed investment.

(b) For all investments of PFRSNJ-managed fund assets, the following limitations shall apply:

1. A binding commitment shall not be made pursuant to N.J.A.C. 17:4A-10, Private Credit Investments, 18, Real Assets, 24, Private Equity, or 26, Absolute Return Strategy Investments, directly to an investment vehicle that, together with all other commitments of total PFRSNJ fund assets to investment vehicles managed by the investment management firm, comprises more than 20 percent of the investment management firm's total assets under management at the time of such binding commitment. Notwithstanding this paragraph, a binding commitment may be made that exceeds the 20 percent limitation, provided that any obligation to fund such binding commitment shall be contingent upon the total amount of total PFRSNJ fund assets invested directly in an investment vehicle managed by the investment management firm (including unfunded commitments) being less than 20 percent of the investment management firm's total assets under management (excluding unfunded commitments) at the time of funding. Calculation of this limitation shall exclude all investments in publicly traded securities.

2. Not more than 45 percent of the market value of total PFRSNJ fund assets shall be represented by the market value of investments made pursuant to N.J.A.C. 17:4A-10, Private Credit Investments, 18, Real Assets, 24, Private Equity, and 26, Absolute Return Strategy Investments. If the 45 percent limitation is exceeded, then the Board shall be notified at the next regularly scheduled meeting of the Board. The Board may grant a six-month grace period to reduce the level of participation to at or below the 45 percent limitation, except that the grace period may be extended by one or more additional four-month periods with the approval of the Board, provided the Board determines such extension is in the financial best interest of the PFRSNJ and its beneficiaries and is consistent with the Board's fiduciary responsibility.

(c) In the event that any subchapter of this chapter contains a limitation on the percentage of an investment, or class of investment:

1. That limitation applies only to investments (or classes of investments) that are the subject of that subchapter;

2. Unless otherwise specified, that limitation shall be construed to exclude investments made pursuant to N.J.A.C. 17:4A-10, Private Credit Investments, 18, Real Assets, 24, Private Equity, and 26, Absolute Return Strategy Investments; and

3. Calculation of the limitation shall exclude investments in the mortgage loan program administered by the New Jersey Housing and Mortgage Finance Authority, pursuant to N.J.S.A. 43:16A-16.9 et seq.

N.J. Admin. Code § 17:4A-1.4

Adopted by 53 N.J.R. 1147(a), effective 7/6/2021

Amended by 56 N.J.R. 795(a) effective 5/6/2024