Illinois Teachers' Retirement System, Springfield, hired Courtland Partners as consultant for its $5.7 billion real estate portfolio at a board meeting Thursday.
Callan Associates has served as real estate consultant for 12 years; its current contract expires Dec. 31. Callan was the other finalist.
The search was part of the regular rebidding process at the end of five-year contracts for consultants of the $44.5 billion pension fund.
Separately, the board approved investing in a new hedge fund and commitments to two funds.
Tourbillon Capital Partners, a new long/short equity hedge fund manager, was awarded an 8% allocation, or about $216 million, from TRS' $2.7 billion hedge fund portfolio. Initial funding will be between $175 million and $200 million, said Kenneth Musick, investment officer for hedge funds.
Trustees also approved a €100 million ($125 million) commitment to Rhone Partners V, managed by Rhone Capital, and a $30 million commitment to Integrated Capital Hospitality Fund II, an opportunistic, value-added real estate fund that will invest in underperforming U.S hotel properties.
If the Rhone fund raises more than the stated target of €2 billion, the TRS commitment will be reduced to €75 million, Jerry Quandt, investment officer for private equity, said during an investment committee meeting Wednesday. In January 2012, TRS committed up to €50 million to Rhone Partners IV for investment in middle-market pan-European and transatlantic companies.
Integrated Capital, a minority-owned firm, will be funded from TRS' emerging managers program.
The board of trustees also ratified three money manager changes made by investment staff between board meetings:
- Wasatch Advisors was hired to manage 3%, or about $377 million, of the $9.4 billion international equity portfolio in an active international small-cap growth equity strategy, said Chuck Handy, investment officer for international equity.
- Cortina Asset Management was terminated because of performance reasons for a $140 million active U.S. small-cap growth equity strategy, said Bill Thomas, investment officer for domestic equity. Lori Hoch, principal and chief operating officer at Cortina, declined to comment.
- Trustees accepted Mr. Quandt's recommendation to ratify the sale of stakes in three older vintage private equity funds: Trilantic Capital Partners III, which was worth $2.5 million as of Sept. 30; Trilantic Capital Partners IV, $1.7 million; and Warburg Pincus Private Equity IX, $41.8 million.
Except for Integrated Capital, all other hires were funded by cash flow, rebalancing or reductions in passive investment strategies.
In other news, R. Stanley Rupnik, chief investment officer, announced that Robert Jiroutek was promoted to become TRS' first risk officer. Mr. Jiroutek was a TRS senior investment analyst in fixed income.
Scottie Bevill, senior investment officer for fixed income, said a search is being conducted now for Mr. Jiroutek's replacement.