Illinois Teachers’ Retirement System, Springfield, today rehired Callan Associates as the $22 billion plan’s investment consultant, beginning Jan. 1. Gordon Dickinson will be the lead consultant.
Trustees granted Callan a one-year contract, with a six-month formal review. They also warned that the system would not tolerate the kinds of problems that led to Callan’s termination three years ago — specifically, late performance reporting, according to trustees. Callan’s fee will total about $540,000 per year, with annual escalation that remains to be negotiated, said Jon Bauman, executive director. The other finalist was Marquette Associates, which quoted a flat fee of $370,000 without escalation.
Callan replaces Strategic Investment Solutions, which resigned this summer.
Separately, the system terminated a $200 million active domestic small-cap value equity portfolio managed by Brinson Partners because of poor long-term performance, based on staff recommendations. Greg Fedorinchik, a Brinson spokesman, declined to comment. Assets will be divided equally between Illinois Teachers’ other active domestic small-cap value managers, Ariel Capital and NorthPointe; each firm now will manage $212.5 million.