Illinois Municipal Retirement Fund, Oak Brook, approved adding $300 million to a passive U.S. largNorthern Trust Asset Managementby Northern Trust Asset Management, raising its total investment in the fund to $1.33 billion.
Funding will come from reducing the $34.7 billion pension fund's allocation to an active U.S. small-cap growth equity portfolio managed by Frontier Capital Management to $338 million. Frontier was placed on watch for performance on Aug. 26, but Dhvani Shah, IMRF's chief investment officer, said the pension fund also wanted to reduce its U.S. equity bias on small caps and growth equity.
A spokeswoman at Frontier said the firm would not comment.
Separately, IMRF returned -0.64% in year ended June 30 vs. 2.47% for the custom benchmark, according to a report by investment consultant Callan Associates
For the quarter ended June 30, it returned 1.53% vs. 1.85% for its custom benchmark, dragged down by underperformance in its domestic equity portfolio.
The pension fund's U.S. equity investments returned 1.79% for the quarter vs. the Russell 3000's 2.63% return.
For IMRF's remaining allocation, fixed income returned 2.72% in the quarter vs. 2.21% for the Barclays Capital Aggregate Fixed Income index; international equity, -0.71% vs. -0.64% for the MSCI All-Country World index ex-U.S.; real estate, 1.73% compared to its 1.91% custom benchmark; alternatives, 0.55% vs. the custom benchmark's 2.18%; and cash, 0.12%.
Asset class returns were not provided for the 12-month returns.
IMRF's asset allocation as of June 30 was 41% domestic equity, 29% fixed-income, 20% international equity, 5% real estate, 4% alternatives and 1% cash.