Illinois State Board of Investment, Chicago, plans to issue separate RFPs for active emerging markets debt and active emerging markets small-cap equity managers to run a total of more than $1 billion, said William R. Atwood, executive director.
Marquette Associates, ISBI's investment consultant, plans to present recommendations on developing the RFPs at ISBI's Sept. 27 meeting, Mr. Atwood said.
The $12.9 billion investment board plans to issue the RFPs later this year.
ISBI expects to allocate 4%, or $520 million, each for emerging markets debts and emerging markets small-cap equity.
The investment board expects to hire one manager for the debt allocation, and it could hire multiple managers for equity.
The planned moves are the result of a Marquette-assisted asset allocation study that keeps ISBI's broad mix unchanged but changed suballocations within some asset classes, Mr. Atwood said.
Among the broad asset classes, fixed income and international equity are each staying at 20% of total assets.
Within fixed income and within international equity, ISBI created new asset classes, respectively, of emerging markets debt and emerging markets small-cap equity, allocating 4% of its total assets to each.
It plans to fund the new subasset classes by rebalancing within their respective allocations. No managers will be terminated.
ISBI is making the moves to emerging markets for diversification, Mr. Atwood said.
ISBI's target allocation is 30% domestic equity, 20% international equity, 20% fixed income, 10% hedge funds, 10% real estate, 5% other real assets and 5% private equity.