Illinois Teachers' Retirement System, Springfield, terminated active domestic large-cap managers Great Lakes Advisors and Holland Capital because of performance and organizational concerns. Great Lakes ran $162 million in value and Holland managed $315 million in growth. The managers were terminated at the $36.8 billion system's board meeting on Tuesday. Until it is reassigned to other managers, the money from the terminated firms will be moved into a $900 million S&P 500 index account managed by RhumbLine Advisors, said Eva Goltermann, the plan's public information officer.
Edward J. Calkins, CIO and managing director of Great Lakes Advisors, said: "We've had a successful relationship with Illinois Teachers over the past three years and wish them well in their new investment strategy." Susan Chamberlain, Holland Capital's COO, said: "We regret Illinois Teachers' decision and are sorry to lose the plan as a client."
Separately, PIMCO, which manages $935 million for the fund in its StocksPLUS enhanced index strategy, was automatically put on watch after its performance fell below the system's preset benchmark.
TRS also approved a $50 million investment in the RLJ Lodging Fund II, which specializes in hotel investments. Funding will come from cash and a reduction in passive and enhanced index accounts. No further information was available.