Illinois State Board of Investment, Chicago, made CB Richard Ellis an offer — a $100 million new commitment.
CB Richard Ellis refused.
The $10.4 billion board made the offer contingent on CBRE restructuring its compensation arrangement with Troy Jenkins, portfolio manager of a $300 million real estate separate account for the board, said William R. Atwood, executive director.
But the board was unable to resolve its concerns, Mr. Atwood said.
So ISBI made an additional $200 million commitment to ING Clarion, raising to $500 million the board's total commitment to the real estate manager, Mr. Atwood said.
The Illinois board initially planned last March to commit an additional $100 million each to CBRE and ING Clarion, pending negotiations over the CBRE compensation.
Townsend Group, the board's real estate consultant, recommended the change in compensation terms to better align the interests between the manager and ISBI. The board authorized Townsend to seek a compensation structure that is more performance based than asset based.
Besides compensation, board members were concerned with CBRE's performance, Mr. Atwood said.
Pam Barnett, CBRE director of communications, couldn't be reached for comment. — Barry B. Burr