The upside to New Jersey’s state pension detour

New Jersey’s state pension took an interesting detour on its way to paring down its hedge fund holdings.

The $72 billion pension, which has said it planned to lower its exposure to the pricey investments, has committed up to $300 million to Blueprint Capital Advisors, a New York-based fund of hedge funds.

But the investment comes with an upside: The pension will earn fee revenue by being one of the fund’s first investors.

Just five months ago, the New Jersey Investment Council unanimously voted to cut its allocation to hedge funds to 6 percent from 11.7 percent in order to save the state $127 million in management and performance fees.

“We not only cut the size of the allocation, we were also looking for managers who were willing to work for lower fees,” Thomas Byrne, chairman of the NJIC told The Post.

While the pension has been slow to trim the hedgies — more than 11 percent of the fund’s assets are still with hedge funds, according to October statements — with Blueprint the pension has found a comparatively lower-cost manager.

Instead of paying the usual 2 percent management fee and 20 percent performance fee, New Jersey will pay 1 percent and 10 percent to Blueprint’s underlying managers, and a nominal fee to Blueprint.