New Jersey pension billions: Benefits, costs

New Jersey, unlike Pennsylvania and other states, has not filed public reports detailing fees paid to the hundreds of private firms which invest invest billions of dollars for the state pension system. In July 2014 I asked for a list of those fees for the past five years under the state Open and Public Records Act.

After delays, the state Treasury Department's public records office in September sent me data showing fees paid to 215 firms that managed state pension funds in any or all of the past five years. My colleagues Tom Torok and Dylan Purcell helped compare and combine this annual fee data with state investment asset and return data from the June 30, 2014 asset report posted to the state pension Web site. The combined data table, linked below, shows how much the state has invested, gotten back, and paid in fees, for these investments.

The data is not complete: a Treasury spokesman acknowledged the data does not include "carried interest" (a share of investment profits) collected by a number of the funds, or fees paid to "fund of funds" submanagers. Also, the table shows fees, but not investment values, for several managers whose funds had "closed" and were no longer reporting assets or returns at June 30, 2014. I expect to update the table as I collect and verify more information. Table attached.

See also this table of fees paid by the New Jersey state pension system to private money managers in each of the years 2009-13. As with the other table, this list does Not include carried interest for private equity or real estate funds. 

Summary totals:
Assets invested (contributed) since the state began hiring private investment managers: $22,715,527,933;
Investment repaid to the pension system (distributed) to date, after fees: $9,056,747.082;
Estimated value of remaining (undistributed) fund investments: $21,254,356,957;
Total fees paid 2009-13: $1,018,172,041.75. 

Put another way, New Jersey has: Invested nearly $23 billion in these funds (since 2006); Paid $1 billion in fees (since 2009), plus additional uncounted fees; Received back $9 billion from the funds so far; and Hopes to eventually collect maybe $21 billion more, over time.