(updated with correction)
Illinois Teachers' Retirement System, Springfield, will issue an RFP for an additional adviser for its private equity co-investment program, said R. Stanley Rupnik, chief investment officer, in an interview.
Trustees of the $33.5 billion fund Tuesday approved a search for a fourth adviser to assist the investment staff in sourcing co-investment opportunities. The RFP will be posted on the fund's website, http://trs.illinois.gov.
Houlihan Lokey, LP Capital Group and TorreyCove Capital Partners were hired by the system in November 2010 as co-investment advisers.
The board also approved moving more than $400 million to four managers.
A $200 million commitment was made to Blackstone Real Estate Partners VII fund, a value-added opportunistic strategy that invests in distressed and undermanaged properties worldwide. Between 80% and 85% of the Blackstone fund likely will be invested in the U.S. The teachers' fund had $54 million invested in Blackstone Real Estate Partners VI fund as of Sept. 30.
Another $150 million was approved for a direct hedge fund investment in the Pine River Fund, a global multistrategy relative value strategy run by Pine River Capital Management.
Funding for both hires will come from cash, passive/enhanced index accounts or rebalancing.
Within the system's emerging manager program, trustees accepted a staff recommendation to move a total of $38 million into a new enhanced return core-plus bond strategy managed by LM Capital Management. The bulk of the money, $28 million, came from LM Capital's opportunistic core fixed-income strategy. The remaining $10 million was a new allocation.
Emerging manager Channing Capital Management received $30 million for its active U.S. small-cap intrinsic value strategy. The source of the funding is the RhumbLine S&P 500 index fund dedicated to the system's $500 million emerging managers program.
Separately, R.V. Kuhns & Associates reported that the pension fund's third-quarter return was -8.86%, underperforming the fund's internal benchmark by 45 basis points.
For the year ended Sept. 30, the fund's return was 3.66% compared to 2.36% for the benchmark; for five years, the fund return was 1.46% vs. 1.73% for the benchmark; and for 10 years, the fund's return was 5.68%, exactly matching the benchmark.