Illinois Municipal Retirement Fund's board on Friday voted to terminate Piedmont Investment Advisors from a $168 million active domestic large-cap core equity portfolio and reduce a similar-style portfolio managed by Progress Investment Management by $200 million.
The money will be moved to cash, in part to pay benefits and to fund previously approved private market commitments.
Piedmont was not dropped for performance and had not been on watch, Dhvani Shah, chief investment officer, told the board at the meeting. “Piedmont is still a very strong manager for us,” Ms. Shah said.
The fund's overall actual U.S. equity allocation is 45.2%, 7.2 percentage points above its target. The two firms are the IMRF's only active large-cap core managers, Ms. Shah said, and their portfolios were “a nice place to do” the withdrawals instead of pulling money from the plan's growth or value portfolios.
Piedmont continues to manage $519 million in active domestic core fixed income for the IMRF, which Ms. Shah said as about 70% of the firm's total assets in that strategy. Progress continues to manage $367 million in large-cap core for the fund and also runs $423 million in active domestic core-plus fixed income.
Also at the meeting, investment consultant Callan Associates reported the fund's investments lost 1.6% in August vs. its custom benchmark's -1.39% return. Ms. Shah said that as of Sept. 25, the fund's assets totaled $31.4 billion, up 4.45% since the start of September and up 12.6% year to date.
Separately, the fund plans to issue an RFP for a non-core fixed-income manager in the fourth quarter, Ms. Shah said. Details of the RFP are still being worked on as part of an asset/liability study underway.
