Pension Funds

Illinois Teachers OKs $424 million to 4 managers, funds

Investment officers of the $51.8 billion Illinois Teachers' Retirement System, Springfield, have invested or committed a total of $424 million to four investment managers or funds.

Trustees were informed Thursday about manager changes made since their last meeting on Oct. 30, including an additional allocation of $150 million to Lion Industrial Trust, an open-ended core U.S. real estate fund. TRS first invested in the 2005 strategy and with the additional allocation Clarion Partners now manages $557 million.

TRS committed €87 million ($99 million) to a new manager, Tristan Capital Partners, for investment in Tristan European Property Investors Special Opportunities Fund 5.

Credit hedge fund manager Tilden Park Capital Management was awarded an additional investment of $100 million bringing the total managed for TRS to $219 million.

In private credit, investment officers committed $75 million to Pemberton European Mid-Market Debt Fund II, managed by Pemberton Capital Advisors. TRS committed $50 million to the previous fund in the manager's series.

As part of the fund's 2018 tactical investment plan, Chief Investment Officer R. Stanley Rupnik said TRS reduced the allocation to risk-parity strategies by $500 million to $700 million.

Bridgewater Associates' $522 million All-Weather risk-parity strategy was reduced by $300 million; the firm continues to manage a total of $446 million for TRS.

TRS reduced the $455 million risk-parity portion of AQR Capital Management's Multi-Strategy XIV. AQR continues to manage a total of $2.4 billion for the pension fund.

In response to an unsolicited bid, Mr. Rupnik said investment staff agreed to sell $153 million in venture capital interests to Landmark Partners. About $140 million was from funds managed by Union Grove Venture Partners and $113 million from Morgan Creek Capital Management's Morgan Creek Venture Access I fund.

TRS terminated two active long-only U.S. equity managers due to performance concerns, Mr. Rupnik said.

Levin Capital Strategies was terminated from management of $440 million in active U.S. large-cap core equity and $157 million was redeemed from Channing Capital Management's active U.S. small-cap value equity strategy.

Rebecca Reiss, Levin Capital Strategies' director of business development, said she could not immediately provide comment. Richard Turnley, regional director of institutional sales and marketing at Channing Capital, did not return a call seeking comment about the firm's termination.

Mr. Rupnik said $100 million of the redeemed assets was used to fund the additional allocation to Tilden Park Capital Management and the rest was put into cash for future investments.

Trustees approved the tactical investment plan for private credit, with an allocation of up to $600 million a year over the five-year period ended June 30, 2023. The move will bring private credit assets to a target of 7% of plan assets from 5% now, said Scottie Bevill, TRS' senior investment officer for fixed income.