Illinois Teachers’ Retirement System, Springfield, is preparing RFP documents for a foreign currency consultant search.
The RFP will be posted on the $44.6 billion pension fund’s website shortly, but an exact date has not been set, said R. Stanley Rupnik, chief investment officer, during an investment committee meeting Thursday. A hiring recommendation is expected in the first half of 2017.
In other news, board trustees hired two active large-cap international equity managers to run $400 million each during Friday’s full board meeting. J.P. Morgan Asset Management is managing a fundamental strategy, while Acadian Asset Management is using a quantitative approach.
Funding for the hires came from the earlier terminations of active, large-cap international managers Aberdeen Asset Management and Jarislowsky Fraser for “poor, deteriorating performance,” said Bill Thomas, investment officer for equities, during the investment committee meeting.
“While short-term performance lagged against the MSCI EAFE Growth (index) benchmark recently, this is not inconsistent with our fundamental, long-term investment philosophy and low turnover approach,” said Quyn Pham, spokeswoman for Jarislowsky Fraser, in an e-mail. “We have a strong belief that investing in high-quality businesses will provide long-term value-add with lower variability and risk.”
Aberdeen spokeswoman Katie Cowley could not be reached for comment.
Another active large-cap international equity manager, Ativo Capital Management, was awarded an additional allocation of $22 million to bring its total assets up to $50 million. Ativo is one of the managers in TRS’ $7.8 billion emerging managers program.
Joining the emerging managers program is Brown Capital Management, which was hired to run $50 million in active small-cap international equities.
Also, an initial investment of $100 million was awarded to KeyQuant for investment in its systematic, trend-following managed futures fund, Key Trend, as part of the buildout of TRS’ hedge fund program.
In real estate, trustees committed up to $300 million to Starwood Global Opportunity Fund XI. The pension fund invested or committed a total of $580 million to earlier Starwood Capital Group funds and co-investments.
Starwood’s hire is the first from the fund’s fiscal year 2017 tactical real estate investment plan, which was approved by trustees at Friday’s board meeting.
TRS will commit between $100 million and $450 million to real estate managers in the fiscal year ended June 30, 2017, with $100 million to $300 million going to opportunistic strategies, with a particular focus on real estate debt to offer better downside protection. Up to $100 million is designated for co-investments and up to $50 million is aimed at value-added deals.
Trustees also approved the private equity investment plan. Between $1.2 billion and $1.6 billion is slated for commitment to between nine and 21 funds and co-investments in the year ending June 30, 2017, according to the plan presented by TorreyCove Capital Partners, the pension fund’s private equity consultant.
The board also ratified two private equity co-investment commitments made by investment staff between meetings.
Up to $40 million was earmarked for a food and beverage company co-investment offered through a partnership between Apollo Global Management and The Gores Group. Up to $25 million was committed to Providence Equity Partners for a co-investment in an equity recapitalization for a telecommunications company.
In fixed income, the board ratified a commitment of $37 million to Taurus Annex Fund between meetings. In 2014, the pension fund committed $30 million to Taurus Mining Finance Fund. The fund’s manager, Taurus Funds Management, set up the annex fund to accommodate the high level of deal flow it was finding in a variety of mining-related opportunities, said Scottie Bevill, senior investment officer for fixed income, during the investment committee meeting.
The board also gave the nod to a commitment of an additional $25 million to Northern Shipping Fund III. TRS made an initial $50 million commitment to the fund, run by Northern Fund Management, from its fixed-income special situations portfolio in 2015.
