Illinois State Board of Investment, Chicago, issued an RFP for a hedge fund-of-funds manager to run up to $150 million in a custom multistrategy portfolio made up of underlying emerging hedge fund managers.
Underlying managers must conform to the Illinois statute definition of an emerging manager as minority- or female-owned or owned by a person with a disability and have at least $10 million and less than $10 billion in assets under management, the RFP said.
Such an underlying hedge fund ownership structure is a new allocation for ISBI, said William R. Atwood, executive director.
“We are not concerned about the ownership structure of the manager or provider of the hedge fund of funds, Mr. Atwood said.
ISBI, which oversees $14.6 billion, is seeking to diversify its $1.4 billion allocation to hedge funds.
Funding will come from ISBI's existing hedge fund-of-fund managers: Entrust Partners, which manages $555 million; Rock Creek Group, $545 million; and Mesirow Advanced Strategies $362 million.
The amount of initial funding, which could be up to $150 million, will depend on the manager hired, Mr. Atwood said.
The RFP is available on ISBI's website. Proposals are due July 18. ISBI expects to make a decision by Dec. 5.
Marquette Associates, ISBI's investment consultant, is assisting with the search.