Illinois State Board of Investment, Chicago, returned a net 6.4% on its investments in 2016, helping boost its total assets to $16.16 billion as of Dec. 31, according to a report to the board from Meketa Investment Group, its investment consultant.
The board outperformed the 6.3% custom benchmark for the year.
For the fourth quarter 2016, the 0.6% return was above the 0.4% benchmark return,
Over three years, ISBI returned 4.7% vs. the benchmark’s 4.8% return; for five years, 8.9% vs. 8.3%; and for 10 years, 4.6% vs. the benchmark’s 4.7%. All multiyear returns are annualized.
In 2016, U.S. equity was the top-performing asset class for ISBI, at 12.5%. That was followed by private equity at 12.1%; real assets, 9.5%; international equity, 3.6%; fixed income, 2.1%; and hedge funds of funds, 0.5%.
For the fourth quarter, private equity led in performance at 5.1%; U.S. equity, 4.7%; hedge funds of funds, 3%; real assets, 1.5%; international equity, -2.1%; and fixed income, -3%
The board’s actual asset allocation as of Dec. 31 was 29.6% U.S. equity, 28.1% fixed income, 19.2% international equity, 13.5% real assets, 3.6% private equity, 5.4% hedge funds of funds and the remainder in cash.
ISBI’s target asset allocation is 30% fixed income, 23% U.S. equity, 20% international equity, 15% real assets, 9% private equity and 3% hedge funds of funds.
ISBI manages the assets of the Illinois State Employees’ Retirement System, Illinois General Assembly Retirement System and Illinois Judges’ Retirement System.