Illinois Teachers Retirement System, Springfield, today rehired Callan Associates as the $22 billion plans 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 Callans termination three years ago specifically, late performance reporting, according to trustees. Callans 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.