Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Innovation Investing Conference
    • 2022 Defined Contribution East Conference
    • 2022 ESG Investing Conference
    • 2022 DC Investment Lineup Conference
    • 2022 Alternatives Investing Conference
Breadcrumb
  1. Home
  2. Print
April 30, 2001 01:00 AM

STAFF MAKING RECOMMENDATIONS: Illinois Universities plans to cut exposure to PIMCO

Barry B. Burr
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    CHAMPAIGN, Ill. - Staff of the State Universities Retirement System of Illinois is identifying and evaluating additional core-plus active fixed-income managers to address trustees' concerns regarding the extensive reliance placed on Pacific Investment Management Co.

    "We like (PIMCO) but we have more exposure than we like," said John R. Krimmel, chief investment officer of the $11.5 billion fund, expressing concerns of the system's trustees. PIMCO, Newport Beach, Calif., manages $1.7 billion, or 65% of the system's $2.6 billion in active fixed income.

    Staff recommendations likely will go to the board for discussion in September with the expectation of hiring additional fixed-income managers before the end of the year.

    The system is looking for more fixed-income core-plus style managers. These managesr will be benchmarked to the Lehman Aggregate bond index and will have the discretion to add, typically up to 30% of the total portfolio, high-yield and international fixed income.

    The staff plans initially to look at six managers it culled from a combination of its own analysis on the Plan Sponsor Network database and suggestions from consultant Ennis Knupp & Associates Inc., Chicago. Mr. Krimmel said the staff wants to evaluate these six before it considers whether to conduct a full search for other prospective managers. It isn't soliciting calls at this time.

    Under consideration

    The managers being considered include Western Asset Management Co., Pasadena, Calif., and TCW Group Inc., Los Angeles. Mr. Krimmel said news of Societe Generale Group's agreement to buy 70% of TCW is a factor to consider in evaluating TCW. BlackRock Inc., New York, also is being considered. It is the only one of the six managers that already manages money for the retirement system. It has three assignments with SURS totaling $1.04 billion, or 9.1% of the system's total assets: $402 million in a mortgage-backed securities portfolio; $355 million in a Lehman Aggregate enhanced index fund; and $283 million in an enhanced equity index fund.

    The names of the other three firms weren't available.

    Mr. Krimmel said the new manager or managers likely would be started with $50 million or $75 million, which could increase to $500 million to $700 million in about two years, a typical way SURS builds a portfolio.

    Apart from this search, SURS is considering adding to the existing fixed-income core-plus assignment of Chicago Capital Management Inc., which runs $175 million for the system. That increase could be done by the end of the year as well.

    Initial funding for Chicago Capital and the other new fixed-income assignment would come from reducing PIMCO, he said. Trustees expect to keep the target fixed-income allocation at 29% of the total fund.

    PIMCO also runs a $458 million enhanced stock index portfolio and an $83 million Treasury inflation-protected securities portfolio. Neither of these strategies is affected by the core-plus evaluation. In all, PIMCO runs $2.24 billion, or 19.6%, of the system's total fund.

    Several years ago, trustees were concerned about the growing share of the system's assets managed by Barclays Global Investors, San Francisco, which then managed the majority of the fund. SURS wound up hiring Northern Trust Investments Inc, Chicago, for some of the domestic index funds, now a $2.9 billion portfolio. Including $98 million in active equity in a manager of emerging managers fund run by Northern Trust Global Advisors, the Northern Trust Co. units now run $3.02 billion, or 26.4%, the largest share of the system's fund.

    Mr. Krimmel said trustees aren't as concerned about the large shares of Northern and BGI because they are index funds.

    Recommended for You
    Read the print edition of P&I
    Read the print edition of P&I
    How low is low? Projections say it's not low enough
    How low is low? Projections say it's not low enough
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    Alternatives: Investing Across the Spectrum
    Sponsored Content: Alternatives: Investing Across the Spectrum

    Reader Poll

    May 9, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Are Factors a Thing of the Past?
    Q2 2022 Credit Outlook: Carry On
    Leverage does not equal risk
    Is there a mid-cap gap in your DC plan?
    Out of the Shadows: The Revolution in Shadow Accounting
    The pivotal role of fixed income markets in the ESG revolution
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    May 9, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright Ā© 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Innovation Investing Conference
      • 2022 Defined Contribution East Conference
      • 2022 ESG Investing Conference
      • 2022 DC Investment Lineup Conference
      • 2022 Alternatives Investing Conference