Illinois Teachers' Retirement System, Springfield, opened a search for an active global macro/tactical asset allocation manager to run up to $500 million, according to an RFP posted on the fund's website Tuesday.
The $37.4 billion fund seeks broadly diversified global macro or GTAA strategies with a target return of between 8% and 10% per year, with annual volatility between 8% and 20% and correlations less than 0.60 to traditional equity and fixed-income markets, according to the RFP. The fund is seeking managers with at least $1 billion under management, although emerging managers also will be considered.
Interested managers should contact the system's general consultant, R.V. Kuhns & Associates, by Nov. 11 to express interest in the assignment; final applications are due Dec. 2. Finalists will be presented at the board's February or May meetings.
Trustees authorized the search Oct. 28 as part of a move to bring the fund's real-return asset class closer to its 14% target allocation ($5.2 billion in current dollars). As of Sept. 30, real-return investments totaled just less than 10%, or $3.6 billion.
Despite the RFP, it's possible the system could increase the size of the portfolios of existing real-return managers rather than hire any new manager, said R. Stanley Rupnik, chief investment officer, in an interview at the Oct. 28 board meeting. The funding source has not been identified, Mr. Rupnik said.
The allocations of two of the system's four existing global macro managers were raised at the Oct. 28 meeting, with AQR Capital Management's mandate rising to 20% from 15%, and Pacific Investment Management Co. 's allotment to 15% from 13.5%. The allocation of a third global macro manager, Wellington Management Co., was decreased to 11% from 17.5%. No change was made to the 20% target allocation of the fourth global macro manager Bridgewater Associates.
As of Sept. 30, AQR managed $566 million; PIMCO, $471 million; Wellington, $607 million; and Bridgewater, $748 million in global macro strategies.
The RFP is available on the fund's website.