Illinois Teachers' Retirement System, Springfield, invested or committed $940 million with three managers and terminated another firm.
At a meeting Thursday, trustees of the $45.8 billion pension fund ratified the decisions of its internal investment staff to hire Acadian Asset Management to run a total of about $500 million and J.P. Morgan Asset Management, $410 million.
Acadian initially was funded with $290 million in July for an active domestic large-cap core equity strategy by way of pacing the investment, said Bill Thomas, investment officer for U.S. equity. Acadian is a new manager for the pension fund. Acadian replaces T. Rowe Price Group, which was terminated in June for management of an enhanced strategy in the same asset class.
J.P. Morgan received full funding on Wednesday for an active emerging markets equity strategy. JPMAM also manages $784 million in a U.S. 130/30 equity strategy and $398 million in an active U.S. growth equity approach.
JPMAM replaces Aberdeen Asset Management. The board ratified the investment team's decision in July to terminate Aberdeen due to performance in a $429 million active emerging markets equity strategy.
James Thorneley, an Aberdeen spokesman, did not respond to a request for comment about the termination.
Aberdeen continues to manage $788 million for the pension fund in an active large-cap international equity strategy.
Mr. Thomas said Herndon Capital Management has been experiencing performance problems this year in the $272 million active U.S. large-cap core strategy it manages for TRS.
Herndon’s allocation was reduced by $100 million in July and “we remain concerned,” said Greg Turk, director of investments, adding that TRS staff will be meeting with Herndon in September for an annual manager review.
Drake Craig, a principal, portfolio manager and president of Herndon Capital, did not respond to a call seeking comment.
The board also ratified a decision by the pension fund's real estate investment team to commit $30 million to Starwood Project Whale, a co-investment that will invest in core retail, office and industrial properties in Norway and Sweden.
Tim Hayes, senior investment officer for real estate, told trustees that the co-investment, managed by Starwood Capital Group, is especially attractive because of its diversification potential in stable, income-generating properties.
TRS has invested in Starwood Global Opportunity Fund X and Fund XII and companion co-investments; the total invested in these vehicles was $157.6 million as of June 30.
Trustees also approved the 2015-2016 real estate tactical plan, as presented by Courtland Partners, the pension fund's real estate consultant.
The tactical plan suggests commitment of up to $850 million during the fiscal year ended June 30, 2016, with $250 million slated for value-added strategies; $500 million for opportunistic funds; and up to $100 million to co-investments, depending on deal flow.
In private equity, trustees tabled until October a staff recommendation to commit $75 million to Madison Dearborn Capital Partners VII, pending further information.
