Illinois Teachers' Retirement System, Springfield, reported a total of up to $775 million in commitments to nine funds run by eight managers during an investment committee meeting on Thursday.
Investment officers of the $63.9 billion defined benefit plan have discretion over manager commitments and hires and reports them to the board of trustees during meetings.
The system's' largest total commitment - $360 million - was to three funds in the $9.6 billion real assets portfolio.
TRS committed $200 million to existing manager LaSalle Investment Management's LaSalle Asia Opportunity Fund VI. LaSalle currently manages $6.9 million for the defined benefit plan.
Up to $100 million was earmarked for Blackstone Real Estate Partners Asia III. Blackstone Group is an existing manager for TRS and currently manages $620 million.
TRS real assets officers committed $60 million to new manager Brasa Capital Management's Brasa Real Estate Fund II.
A total of $275 million was committed from the system's $15.8 billion global income portfolio to three managers.
Two of the managers are new for TRS with $100 million each committed to Fundamental Advisors' Fundamental Partners Fund IV and IFM Investors' IFM Infrastructure Debt Fund.
Existing manager Proterra Investment Partners was awarded a $75 million commitment to Proterra Credit Fund 2. Proterra currently manages $50 million of defined benefit plan assets.
Investment officers committed a total of $140 million to three funds managed by two firms from the system's $10.2 billion private equity portfolio.
Existing manager Inflexion Private Equity Partners received a commitment of $105 million for investment in Inflexion Buyout Fund VI. The firm currently manages $150 million for TRS.
TRS committed a total of $35 million to new venture capital manager Sky9 Capital with $25 million to Sky9 Capital Fund V and $10 million to Sky9 Capital MVP Fund II.
Investment officers made partial redemptions totaling $265 million from three existing managers in the system's $5.5 billion Diversifying Strategies portfolio, which includes hedge funds and risk-parity funds.
The largest redemption was $125 million from Aspect Capital's Aspect Systematic Global Macro US Fund. Aspect Capital currently manages $342 million for TRS.
TRS redeemed $100 million from Tilden Park Capital Management's Tilden Park Investment Fund. The firm currently manages $287 million for the system.
Graham Capital Management, which currently manages $441 million for TRS, had a $40 million redemption.
In response to a trustee's question during the investment committee meeting, R. Stanley Rupnik, TRS' executive director and chief investment officer, said the redemptions from the Diversifying Strategies portfolio were the result of portfolio rebalancing to take advantage of other investment opportunities.
During their full board meeting Friday, trustees approved the investment of $2.5 million of seed funding for the actively managed ESG fixed-income fund that existing TRS manager Garcia Hamilton & Associates will create for the system's new 457 plan which will launch Jan. 10, 2022.
Garcia Hamilton runs actively managed ESG fixed-income strategies for other defined benefit plans, but the TRS fund will be its first offered within a defined contribution plan.
If Garcia Hamilton reaches $5 million in assets in the fund from other defined contribution plans, TRS has the option to request that the seed money be returned, said Scottie D. Bevill, senior investment officer for credit.
Garcia Hamilton currently manages $900 million for TRS in actively managed core fixed income and enhanced cash strategies.
In other board news, trustees approved an increase in the target allocation for Minority and Women-owned Business Enterprises to 22% from 21%. In the fiscal year ended June 30, 24.3% of plan assets were managed by MWBE firms, Jose Gonzalez, told trustees during Thursday's meeting. Mr. Gonzalez is the investment officer for the system's $14 billion emerging managers program.
TRS reported that its long-term funded ratio improved slightly to 42.5% in the fiscal year ended June 30 compared to an average ratio of 40.7% over the previous 10 years.
Because the system's assets under management rose to a new high of $63.9 billion thanks in part to a 25.5% net return for the fiscal year ended June 30, TRS' unfunded liability declined slightly to $79.9 billion from $80.7 billion the prior year.
TRS' long-term liability in the most recent fiscal year totaled $138.9 billion, a 2.4% increase over the fiscal year ended June 30, 2020.
