Illinois Teachers' Retirement System's board of trustees today agreed in principle to adopt four changes to its investment policy, related to fiduciary responsibility.
The $34 billion pension fund plans to ban payment of placement, marketing or finder's fees across all asset classes; require legal approval of all partnership documents prior to board approval; develop guidelines defining the circumstances under which trustees may meet privately with prospective investment managers; and expand disclosure of third-party fees. The board will likely vote on the changes at its Nov. 3-4 meeting.
Jon Bauman, executive director, recommended that the board consider exempting the ban on fees for "full-time, established entities." He also noted that approving transactions that are subject to final negotiations can have the "unintended and adverse consequences" of leading to additional due diligence. He recommended leaving room in the policy change for "inevitable contingencies" but said it should be clear it's "not standard practice to have loose threads."