Illinois Teachers' Retirement System, Springfield, today authorized a search for a private equity consultant.
The contract of the $32 billion fund's existing private equity consultant Pacific Corporate Group, expires June 30, said Zachary “Zak” Doehla, alternative investment officer.
Mr. Doehla said he and other TRS investment staff will come back to the board in May seeking approval for a private equity co-investment proposal that will include a search for a co-investment adviser/consultant. The size of the new subasset class has not been set, but Mr. Doehla stressed that the co-investment program will be part of the fund's existing 7% private equity target allocation.
“This is another way to make private equity investments,” he told trustees, noting that the economics of co-investment deals should result in cost savings and higher returns.
Also at the Feb. 26 board meeting, TRS trustees approved the hiring of Loomis Sayles to manage a 3% allocation of the fund's domestic equity target, currently about $260 million, in active domestic large-cap value equities.
Denali Advisors, which managed $39 million in active domestic large-cap value equities, was graduated out of the system's emerging managers program and awarded a 2.25% slice of the domestic equity allocation. Denali will be awarded an additional $160 million to bring the mandate up to the target.
Funding for both managers will come from reducing to 4.75% from 7% a similar-style portfolio run by Dodge & Cox, which had $648 million as of Dec. 31.
Also hired to manage $50 million in active domestic large-cap value equities was Lombardia Capital Partners, with funding coming from TRS' $500 million emerging managers program. Lombardia has managed $40 million in active domestic small-cap value equities within the emerging managers program since November 2008.