Illinois Teachers’ Retirement System, Springfield, committed and invested a total of $1.55 billion to eight different managers, according to a news release from the $37 billion retirement system.
The retirement system’s board hired real-return managers Standard Life Investments to run $400 million and AQR Capital Management to handle $300 million.
Funding comes from terminating three real-return managers — Wellington Management, which ran $357 million in a GTAA portfolio; and commodity fund managers Schroder Investment Management, which handled $225 million, and Gresham Investment Management, which managed $118 million. “Due to the volatility within commodity investments, the changes focus on a shift of approximately $700 million to strategies that better protect TRS assets from inflation,” the news release states.
The board also hired Westwood Management to run $75 million in opportunistic fixed income and added $40 million to Pacific Investment Management Co.’s undervalued credit securities portfolio, raising it to $115 million. Funding came from rebalancing.
In domestic equity, the board hired Cortina Asset Management to run $107 million in a smidcap strategy.
The board also made private equity commitments of $250 million to Riverstone Holdings, a global energy fund; $200 million to Providence Equity Partners, which will invest in telecommunications, software and Internet services development; and $100 million to an Oaktree Capital Management distressed debt fund.
The retirement system made previous commitments of $280 million to an earlier Riverstone Holdings fund, $116 million to Providence and $294 million to Oaktree.
In real estate, a $75 million commitment was made to LaSalle Investment Management Asia, a real estate fund that invests in Asian and Australian properties.
The board also hired State Street Global Markets, J.P. Morgan, Credit Suisse, Citigroup and Loop Capital to provide transition management services. An RFP was issued in November. State Street and J.P. Morgan were the only firms retained from the past lineup of six managers; Goldman Sachs and Morgan Stanley eliminated their transition programs; BlackRock was not used last year because it did not meet TRS’ requirements; and Barclays was acquired by BlackRock in 2009.
Also, the board approved issuing an RFP for a general investment consultant. Incumbent R.V. Kuhns is invited to rebid. The firm’s contract expires at the end of the year. The board anticipates making a hiring selection late this year. No timetable for the RFP has been set, although the board plans to interview finalists in October or December, said David Urbanek, spokesman for the retirement system.
