Illinois State Board of Investment, Chicago, adopted a "responsible contractor policy" for new real estate investments that will allow the $10.3 billion system to invest only in limited partnerships and other vehicles whose properties pay employees prevailing wages and benefits.
"ISBI believes that utilization of such contractors adds value to its investments by ensuring that services are provided by adequately trained, experienced and motivated workers who deliver a higher quality product and service," the new policy says. It also notes that "all investments and services must be made and managed in a manner that produces a competitive risk-adjusted return."
The policy does not apply to existing investments to which the fund already is committed, said William Atwood, executive director. The board has almost 6% of its assets in real estate.