The $47.3 billion Illinois Teachers' Retirement System, Springfield, approved or ratified investments or commitments totaling about $1.5 billion to 11 managers during a board meeting Thursday.
Three managers within the plan's global equity allocation split a total of $520 million, including a $255 million allocation to existing manager AQR Capital Management's quantitatively managed U.S. small-cap equity strategy. AQR manages a total of about $2 billion in four other strategies for TRS.
Matarin Capital Management, a new manager, was awarded $30 million from the fund's $700 million emerging manager portfolio, for investment in a quantitatively managed U.S. small-cap value fund.
Also, trustees ratified the decision by investment staff to increase the amount managed by LSV Capital Management in an existing active U.S. large-cap value equity strategy. The target weight to the strategy was raised to 12% from 9% of the fund's $8 billion global equity portfolio. LSV's assets will rise to about $950 million from about $715 million as a result. LSV manages a total of $2 billion in three strategies.
Bill Thomas, global equity investment officer, told trustees during an investment committee meeting Wednesday that LSV's big top-up was part of the fund's shift to a higher percentage weighting to large-cap equities from small-cap stocks in response to market conditions. The target weighting to U.S. small-cap equities was reduced to 15% from 17% while U.S. large-cap equities were raised to 17% from 15%.
Greg Turk, director of investments, said he agreed with the shift to raise U.S. large-cap stocks because "post-Trump, small-caps are gone."
In private equity, commitments included $250 million to Apollo Investment Fund IX, a global large buyout fund managed by Apollo Global Management. The pension fund has previously invested in eight earlier Apollo private equity vehicles: four commingled funds, two separate accounts and two co-investments.
New Mountain Capital received a $100 million commitment to New Mountain Partners V, a middle-market buyout fund. TRS has invested or committed to three prior New Mountain funds.
Altaris Capital Partners, a new manager, was awarded a total commitment of $75 million, $60 million of which is earmarked for Altaris Health Partners IV, a commingled fund, with the balance going to Altaris Constellation Partners IV, a co-investment vehicle.
Real estate commitments included $200 million to Carlyle Group's latest fund, Carlyle Realty Partners VIII. Carlyle Group manages two other real estate funds for TRS.
Trustees ratified a decision by investment officials to commit $50 million to a co-investment to provide recapitalization funds to Starwood Capital Group alongside Neuberger Berman's Dyal Capital Partner, which took a minority ownership stake in Starwood Capital Group in September through private equity fund Dyal Capital Partners III.
Two existing direct lending managers received commitments to new funds from the plan's $9 billion global fixed-income portfolio.
Trustees approved commitments of $125 million to NXT Capital Senior Loan Fund V, and $100 million to specialist energy direct loan fund Riverstone Credit Partners II, managed by Riverstone Holdings. TRS invested or committed to two earlier NXT Capital funds and one credit fund managed by Riverstone.
Finally, the board ratified the decision by staff to increase assets invested in PIMCO's multiasset volatility hedge fund strategy by $100 million for a total of about $145 million.
Edward Shim, investment officer for hedge funds, said during Wednesday's investment committee meeting that the increased investment in Pacific Investment Management Co.'s specialty volatility fund was made "in order to be ready ahead of time to grab opportunities" when volatility rises.
Mr. Turk added that the strategy's "zero correlation strategy does very well in rising rate environments."