Illinois Student Assistance Commission, Springfield, approved a new target asset allocation for the College Illinois prepaid tuition program that will cut the 529 plan's exposure to alternatives to 27% from 47%, confirmed spokesman John Samuels.
The fixed-income target was also lowered to 25% from 30% as equity allocations more than doubled. Under the new long-term targets, domestic equity will increase to 26% from 15%, while international equity will increase to 22% from 8%.
In an effort to improve liquidity, the $1.1 billion fund will decrease three of its four alternative asset class targets while private equity will remain at 7%. Real estate will decrease to 10% from 20%; absolute return, to 10% from 15%; and infrastructure, once at 5%, will be eliminated.
“The change in allocation targets will not result in any immediate changes in fund managers,” Mr. Samuels said in an e-mail.
Investment consultant Callan Associates conducted the asset allocation study.