Illinois State Universities Retirement System, Champaign, has launched an RFP for long-only convertible bond managers.
The $24.7 billion pension fund will consider both U.S. and global strategies, according to the RFP. These strategies, if incorporated into SURS’ portfolio, would fall within the “stabilized growth” portion of the portfolio. The mandate, if awarded, will likely range from $250 million to $500 million.
As of June 30, the stabilized growth portfolio comprised core real assets, public credit fixed income and private credit, according to the pension fund's latest annual report. These three asset classes accounted for 16.4% of total assets.
SURS also noted in the RFP that it might hire more than one manager for this mandate.
SURS spokeswoman Lisa Storm Fink said the pension fund does not currently have convertible bonds in the portfolio so this would be a new mandate. “We believe this will complement our current portfolio and has the potential to provide higher returns in the long term,” she added.
Moreover, qualifying firms must have at least $1 billion in assets under management, including at least $700 million in dedicated convertible bond strategies. However, qualified women-, minority- or disabled-owned businesses will be exempt from the minimum AUM requirements and will be evaluated for consideration at SURS’ discretion.
The RFP is available on SURS' website. Proposals are due by 4:30 p.m. CST on March 7. The pension fund expects to make a selection on June 5.
