Illinois Municipal Retirement Fund, Oak Brook, will boost its target allocations to real estate and alternatives and cut its fixed-income and international equity targets, effective Jan. 1.
In a new strategic asset allocation approved Friday by the board of the $32.3 billion pension fund, the target allocation for alternatives — absolute return, private equity, timber and agriculture — will be 9%, up from 6%; real estate, 8% from 6%; fixed income, 27% from 29%; and international equity, 17% from 20%.
The pension fund kept its 38% U.S. equity and 1% cash targets.
Also approved was moving $325 million to the BlackRock U.S. Debt Index fund from two S&P 500 index funds run by Northern Trust Global Investments to help rebalance the pension fund's U.S. equity allocation, which at an actual 45% of total assets is seven percentage points above the target. Its actual fixed-income allocation, at 26%, is three percentage points under its current target.
To fund the move, the NTGI S&P 500 Growth Index fund will be trimmed by $225 million and the NTGI S&P 500 Value Index fund will be cut by $100 million.
The shift will increase the pension fund's assets in the BlackRock fund to $1.3 billion; the NTGI growth fund will have $667 million, and the NTGI value fund, $662 million.
Separately, the board approved an additional $35 million commitment to real estate fund Torchlight Debt Opportunity V, managed by Torchlight Investors. The pension fund committed $30 million to the same fund in October 2012.
Also, the pension fund's investments returned 6.14% in the quarter ended Sept. 30, compared to 4.89% for its custom benchmark, and 2.78% in October, vs. the benchmark's 2%.