Illinois Teachers' Retirement System trustees reviewed the $22 billion plan's $7.7 billion in fixed-income investments, but delayed restructuring the asset class until the December meeting. Consultant Callan, along with staff for the Springfield-based plan, recommended the plan move away from separate U.S. and international fixed-income managers and benchmarks. Fixed-income manager changes may take place in February, said Charles Self, the plan's CIO. If so, Gordon Dickinson, the plan's consultant with Callan, will conduct the manager searches. The changes are part of an on-going asset allocation review and restructuring.
Trustees also will review the plan's real estate investments at their October meeting and likely approve a restructuring, Mr. Self said. Manager hires likely will take place throughout 2003 as the fund builds up to a 14% target; its current real estate target is 10.6% of assets, he added.
The board approved private equity investment policies and procedures and set a schedule for investments over the next four years, as the plan increases its private equity target to 6% of assets, from 2.8%.
It also approved five transition managers for use as needed. They are: Morgan Stanley; State Street Global; Deutsche Bank; Frank Russell; and Goldman Sachs.
Trustees also voted to limit the amount a single manager and its subsidiaries can manage for the fund to 10% of total assets, although it will not pull assets from a manager if market returns bump its total above the limit; accepted a change in master trustee Northern Trust's contract, lowering its fees to $550,000 from $675,000 per year; and voted to retain consultant Callan, which was on a six-month trial period within a one-year contract.