Teachers' Retirement System of Illinois, Springfield, adopted a new long-term asset allocation mix and committed $215 million in private and public equities. The new allocations are: U.S. equities, 35%; non-U.S. equities, 14%; U.S. fixed income, 31%; non-U.S. fixed income, 7%; real estate, 10%; and alternative investments, 3%.
The biggest change in absolute dollars will come in U.S. bonds, now at 18% of assets; non-U.S. bonds, now at 12%; and real estate, now 15%. A spokesman said changes will be made gradually. Other current allocations are: U.S. equities, 38%; non-U.S. equities, 12%; alternatives, 1%, and cash equivalents, 4%.
The $15 billion system also committed $30 million to the SCP Private Equity Partners, $30 million to Mesirow Capital Partners VIII, $40 million to TCW/Latin America Private Equity Partners and $5 million to Periscope I Fund, a fund run by Evergreen Canada-Israel, which invests in Israel.
Delaware Investment Advisers was hired for $110 million in non-U.S. stocks. Funding for Delaware come from the termination of Daiwa International, which ran a Japan-only portfolio. The rest of the assets come from cash flow.
The fund also permanently ended its overlay programs. The costs of hedging against a major market tumble became greater than the risk of a market decline, a statement said.
Northeastern University, Boston, added three hedge funds to its $305 million endowment fund.
Davidson Kempner, Standard Pacific and West Highland each will manage $3.5 million to $5 million, said Joseph D. Murphy, assistant treasurer. Assets will come from the endowment's increased allocation to alternative investments of 18% from 15% of total assets. Funding for the increase came from fixed-income manager Standish, Ayer & Wood, which continues to manage $90 million.
Cambridge Associates assisted.
Methodist Health Systems, Memphis, Tenn., hired two managers and two mutual funds for its $132 million pension fund, said Larry D. Spratlin, assistant treasurer. Sector Capital will run $9.7 million in equities and INVESCO, $5.6 million in REITs. Templeton Foreign and Harbor International Growth mutual funds received $2.8 million each.
Assets came from cash flow and a reallocation. Gerber Taylor Associates assisted.
University & Community College System of Nevada, Reno, hired Cadence Capital as a midcap growth equity manager for its $174 million endowment fund. Cadence will run $10.2 million. Also in the running were MFS and TCW, said Tim Ortez, director of banking and investments.
Cadence replaces an existing manager that Mr. Ortez would not name. Cambridge Associates assisted.
Church Foundation trustees, Philadelphia, hired their first external managers. T. Rowe Price and Barrow Hanley Mewhinny & Strauss will split the $100 million foundation's 60% allocation to equities, and Miller Anderson & Sherrerd will handle the remaining 40% in fixed income. The search was conducted in-house.
Adventist Health System, Winter Park, Fla., hired three managers for its $33 million regional medical malpractice plan. Wells Fargo will manage $13.7 million in U.S. fixed-income; Oppenheimer, $9 million in domestic large-cap equities; and Putnam, $4.8 million in international equity.
A small-cap equity manager and an international fixed-income manager also were hired. Names are being withheld until contracts have been signed.
Prudential Securities assisted.
Lathers Local 68, Pleasanton, Calif., hired McMorgan & Co. to run its entire $19 million in assets in a balanced portfolio, said James McMullan, administrator. The firm replaces Wright Investors' Service, which was terminated because of poor performance, he said. The search was conducted in-house. Officials at Wright did not return phone calls.
Edwin T. Burton III was appointed chairman of the Virginia Retirement System, Richmond. Mr. Burton replaces James C. Wheat III, who was appointed chairman of the $24.6 billion fund in April 1994. Mr. Burton is an investment banker and professor of finance at the University of Virginia. Mr. Wheat remains on the nine-member board.
Patrick Sullivan and Adam Berger, both directors, left AEW Capital Management. Sources say they left to start their own firm. Both were unavailable for comment.
Also, Greg Shea, an AEW senior vice president, is leaving to become the president of Allright Parking, an operator of parking lots, an AEW spokesman confirmed. AEW and Apollo Real Estate Partners II bought the company in 1996.
Messrs. Sullivan and Berger will be replaced from within. Information about replacing Mr. Shea was not immediately available