Searches and Hires

Illinois Municipal adds 2 private equity separate account managers

Pension fund also commits $150 million to 2 managers

Illinois Municipal Retirement Fund, Oak Brook, on Friday hired HarbourVest Partners and Goldman Sachs Asset Management as private equity separate account managers for the $40.9 billion pension fund, subject to legal due diligence.

HarbourVest will be given an initial $200 million and GSAM will receive an initial $100 million. IMRF staff will determine future commitments.

The two firms will join current private equity separate account managers Abbott Capital Management and Pantheon Ventures, which manage $331 million and $216 million, respectively.

HarbourVest and GSAM will operate their separate accounts in an open architecture fund-of-one structure to make global commitments to primary funds in a variety of fund styles, according to a report from Callan, the pension fund's investment consultant.

"It's the right time to add this," Dhvani Shah, IMRF's chief investment officer, told the board's investment committee on Thursday. "It keeps our options open in deploying our capital."

Adding the separate account managers will help Illinois Municipal commit more assets over the next 10 years for the pension fund to reach its 8% target alternatives allocation, Ms. Shah said. As of March 31, the pension fund had a 3.7% actual allocation to alternatives.

The Callan report said IMRF will need to commit $875 million annually to alternatives through 2027 to reach its target allocation.

Ms. Shah said that along with IMRF's four-person internal alternatives team, the new managers will allow the plan to increase its commitment capacity and create a holding vehicle to accommodate future investment requirements.

An RFP was issued in February.

Also, the board approved private equity commitments of up to $100 million to Vista Equity Partners VII, which invests in enterprise software companies, and up to $50 million to Valor M33 II, a growth equity co-investment vehicle to Valor Equity Partners funds III and IV, in which IMRF already invests a combined $80 million.

Both firms are minority owned. IMRF's emerging managers program mandates that 20% of plan assets be placed with minority-, women- and disabled-owned money managers.