Illinois Teachers' Retirement System will search for a private equity consultant and an additional active emerging markets equity manager in 2015.
Trustees approved the issuance of RFPs at a board meeting Thursday at the Springfield headquarters of the $44.5 billion pension fund.
The five-year contract of the pension fund's existing private equity consultant TorreyCove Capital Partners will expire on June 30, 2015. TRS is required to rebid contracts every five years, Jerry Quandt, investment officer for private equity, told trustees.
TorreyCove is invited to rebid.
The timing for each of the searches has not been set, although Mr. Quandt said he expects to present finalists for the private equity consultant slot at the pension fund's June meeting.
A third active manager is also sought to further diversify TRS' $1.6 billion emerging markets equity portfolio, said Chuck Handy, investment officer for international equity.
The new emerging markets firm will manage 3%, or about $282 million, of the pension fund's overall international equity portfolio, which totaled $9.4 billion as of Sept. 30.
The existing active emerging markets equity managers are AQR Capital Management, which managed a 7.4% allocation of the international equity portfolio or about $698 million and Aberdeen Asset Management, which managed a 6.8% allocation or about $641 million.
AQR will retain its existing 9.5% target allocation, but Mr. Handy said Aberdeen's target will be cut to 5% and passive emerging markets manager Northern Trust Asset Management's allocation will be trimmed by one percentage point to 3% of the international stock portfolio.
The rest of the funding for the new emerging markets equity manager will come from rebalancing and cash from the November termination of American Century Investments for personnel changes, Mr. Handy told trustees.
American Century managed 4% of the international equity portfolio in active international small-cap growth equities, although assets were reduced earlier in 2014 to $135 million, as of Sept. 30.
The board ratified the firm's termination by investment staff at the Thursday board meeting.
The pension fund also doubled the target allocation to Strategic Global Advisors' active international large-cap core equity strategy to 4%, or about $385 million, of the international equity portfolio.
