Illinois Teachers' Retirement System, Springfield, approved investments or commitments totaling up to $1.1 billion at a board of trustees meeting Friday.
The $45.5 billion pension fund added the first systematic managed futures allocation within its $2.9 billion hedge fund portfolio.
The total allocation to managed futures strategies will be $500 million and hedge fund portfolio assets will be increased by between $300 million and $400 million before the end of the year, Kenneth Musick, hedge fund investment officer, told trustees.
Between $100 million and $150 million each was allocated to Brevan Howard Systematic Trading Master Fund, managed by BH-DG Systematic Trading, and Transtrend's Diversified Trend Program.
Mr. Musick said he has identified five more managed futures managers to add to the portfolio; up to four of those firms will be presented to the board over the next six months. The initial allocations to the Brevan Howard and Transtrend strategies might be reduced as the new managers are funded, he added.
Also, TorreyCove Capital Partners was rehired for another five-year contract for private equity consulting services, effective July 1. TRS has $5.1 billion in its private equity portfolio.
Private equity commitments included a $100 million commitment to TA XII, managed by TA Associates, TRS' first with this manager.
The following commitments were made to new funds managed by existing private equity managers: €100 million ($114.5 million) to EQT VII, managed by EQT Partners, and $100 million to Oaktree Opportunities Fund Xb, managed by Oaktree Capital Management.
In other news from the meeting, the board hired Axiom International Investors to manage $282 million in active emerging markets equities.
Bill Thomas, equity investment officer, told trustees the search for another emerging markets manager remains open while the two other finalists — EARNEST Partners and J.P. Morgan Asset Management — undergo further review.
Part of the funding for the Axiom hire came from a $200 million reduction of the Aberdeen Asset Management's $628 million emerging markets equity strategy with the balance coming from a $282 million Northern MSCI Emerging Markets index fund managed by Northern Trust Asset Management.
Trustees approved the recommendation of Greg Turk, director of investments, to put Aberdeen on watch for the emerging markets strategy because “performance is of concern.” Mr. Turk added that staff members are worried that assets in the firm's emerging markets strategy have grown too large, “making it hard to trade.”
Messrs. Turk and Thomas will meet with Aberdeen in London next month to review the firm's performance and investment strategy. Katie Cowley, a U.S.-based Aberdeen Asset Management spokeswoman, did not return a phone call seeking comment.
In real estate, up to $100 million each was committed to funds from two new managers: Fortress Japan Opportunity Fund II, managed by Fortress Investment Group, and Rockpoint Real Estate Fund V, managed by Rockpoint Group.
In other manager news, trustees approved the graduation of Garcia Hamilton & Associates from the fund's $841 million emerging manager program to full manager status.
The firm will continue to manage $300 million in a custom cash management strategy and $112 million in a float-rate fund. Scottie Bevill, senior investment officer for fixed income, said there are no plans to increase Garcia Hamilton's assets as of now.