Illinois Police Officers' Pension Investment Fund, Peoria, hired Aristotle Capital Management and Ares Management to run a total of $300 million in bank loan portfolios.
The $10 billion investment fund's board approved the actions at its Feb. 9 meeting, a webcast of the meeting showed.
IPOPIF issued an RFP in September as a result of its transition to its long-term asset allocation. The Police Officers' Pension Investment Fund was created by a law signed in December 2019 by Illinois Gov. J.B. Pritzker consolidating 649 downstate and suburban police and fire pension plans into two new pension funds. In the intervening years, the investment fund has allocated the majority of its assets to temporary passive strategies.
Both managers will run commingled funds for the investment fund. Aristotle Capital will manage $200 million in its Aristotle Bank Loan Fund, and Ares Management will manage $100 million in its Ares Institutional Loan Fund.
Funding will come from a passive high-yield portfolio managed by State Street Global Advisors, which had $991 million in assets as of Dec. 31. The investment fund's long-term target allocation to high yield is 3%.
Investment consultant Verus Advisory assisted.