Teachers' Retirement System of Illinois, Springfield, in the next few days will search for general investment and specialist private equity consultants, said Stan Rupnik, CIO of the $34 billion system. Incumbent Callan's general consulting contract is up at the end of the year, he said; the firm may rebid. Mr. Rupnik said the system wants a specialized private equity consultant as its allocation to the asset class increases in size and complexity. RFPs for both consultant searches will be available in the next few days on the plan's website, trs.illinois.gov.
Separately, staff members are preparing a structural review of the plan's domestic equity allocation for the board's Dec. 10 meeting, Mr. Rupnik. Among the possible changes: reallocation of $755 million from an active domestic large-cap equity portfolio managed by Bear Stearns, terminated for performance and organizational reasons, Mr. Rupnik said. "We are disappointed with their decision," said Russell Sherman, a Bear Stearns spokesman. "We believe there was insufficient time to adequately judge the fund's long-term performance. We hope they will reconsider their position sometime in the future."
Separately, the system completed a review of its $4 billion fixed-income allocation, moving to active domestic management from passive and increasing its active core-plus allocation to 70% from 50%, Mr. Rupnik said. The system's consultant, Gordon Dickinson of the Chicago office of Callan Associates, will conduct a search for an active core-plus fixed-income manager to run $800 million and an enhanced index fixed income manager to handle $600 million. Funding for the additional allocation to core fixed income likely will come from rebalancing and possibly from reductions of other managers, both bond and equity, Mr. Rupnik said. The enhanced manager will replace passive managers State Street Global Advisors and Northern Trust, which managed $540 million and $82 million, respectively.
Also, LM Capital was terminated for performance of a $190 million active domestic core fixed-income portfolio. The money was moved to Taplin, Canida & Habacht, which already manages $190 million in a similar strategy for the system, Mr. Rupnik said. John Chalker, managing director and co-founder of LM Capital, could not be reached by press time for comment.