Illinois Teachers Retirement System, Springfield, today adopted a new structure for fixed income and approved searches for fixed-income and commodities managers. Officials of the $41.8 billion fund will seek an active long-duration bond manager to run $630 million, an active non-U.S. bond manager to run $326 million, and one or more managers to run a total of $400 million in commodities. The non-U.S. bond portfolio may be split, with half the allocation $188 million going to one or more active emerging markets bond managers, depending on results of the search, said Eva Goltermann, public information officer.
Scottie Bevill, senior investment officer for global bonds/real return, said the long-duration search may be completed within three months, while the international search may take as long as six to nine months.
In addition, Mr. Bevill and Becky Gratsinger, TRS lead consultant from R.V. Kuhns & Associates, said they plan to research new cutting-edge strategies such as 130/30 and LIBOR-plus during the next year, with a view to possibly investing as much as 5% of the overall fixed-income portfolio.
Fund officials also allocated 69% of the $7.1 billion fixed-income portfolio to active core plus, 15% to enhanced index, 10% to active long duration and 6% to active non-U.S. fixed income. The previous fixed-income targets were 78% active core plus, 13% enhanced index and 9% active core.
BlackRock was terminated from a $1.4 billion core-plus fixed-income portfolio as part of the plans continued reduction of fixed-income assets and for performance. Bobbie Collins, a BlackRock spokeswoman, said it is the firms policy not to comment on client activity.
Trustees kept PIMCO on the watchlist for performance with a $1.1 billion StocksPLUS strategy. Stan Rupnik, CIO of the system, said staff could make a manager change later in the year.