The $48.7 billion Teachers' Retirement System of the State of Illinois, Springfield, approved fiscal year 2018 pacing plans for its private equity and real estate investment programs totaling up to $2.1 billion during an Aug. 22 board meeting.
Trustees approved the tactical plan for real estate investments developed by retirement system investment staff and real estate consultant Courtland Partners that would commit between $100 million and $500 million in the fiscal year ending June 30, 2018. The pacing plan in 2017 was for $100 million to $450 million.
The tactical plan also includes a search for real estate co-investment consultants. Contracts for the current two, ORG Portfolio Management and Real Asset Portfolio Management, expire June 30, 2018, Timothy Hayes, senior investment officer – real estate, told trustees during a meeting of the board's investment committee.
No further information was available about the upcoming search.
TRS has committed more than $130 million to real estate co-investments since 2013.
Within the real estate tactical plan, the retirement system's real estate investment team has the go-ahead to invest up to $100 million in real estate-oriented co-investments in the fiscal year.
As of March 31, the $7 billion real estate portfolio represented 14.7% of total assets; the target allocation to the asset class is 16%.
The first commitment from the real estate portfolio for FY 2018 was a commitment of up to $100 million earmarked for Blackstone Real Estate Partners Asia II, an opportunistic fund managed by Blackstone Group LP. TRS committed $100 million to the first fund in the series. Blackstone managed a total of $592 million as of June 30 in various strategies for the pension fund.
TRS trustees also approved the private equity tactical plan for fiscal year 2018 with a commitment pace of between $1.2 billion and $1.6 billion, the same as for 2017, and for each fiscal year through 2022.
As of March 31, the $6.3 billion private equity portfolio represented 12.9% of plan assets; the target weighting is 15%.