Illinois Municipal Retirement Fund's board on Friday approved committing up to $50 million to Starwood Global Opportunity Fund X, managed by Starwood Capital Group.
The opportunistic real estate fund focuses on U.S. and European properties.
Funding will come from reducing the $33.6 billion defined benefit pension fund's 66% global equity allocation, which is overweight its 55% target. No managers will be terminated, said John Krupa, spokesman for the Oak Brook-based IMRF.
Illinois Municipal committed $20 million to Starwood Global Opportunities IX in 2012. Its overall real estate target is 8% of plan assets, with an actual allocation of 5.1%.
The pension fund's overall first-quarter return was 1.94%, compared to its custom benchmark's 1.87% return, according to a report from Callan Associates, IMRF's investment consultant. The 4% allocation to alternatives — private equity, hedge funds, agriculture and timber — was the top-performing asset class for the quarter, with 4.39%. Its 45% U.S. equity allocation returned 1.72% for the three months ended March 31; the 26% fixed-income portfolio, 2.33%; 21% international equities, 1.35%; and 4% real estate, 3.1%.
