US - The Illinois Teachers' Retirement System (TRS) doled out over $1bn in assets to new domestic equity, private equity and fixed income managers, and hired three new consultants.
The board also plans to issue a request for proposals for a risk management system.
The $31.3bn pension fund said yesterday it would invest $250m each in domestic equity large cap core mandates run by MFS Investment Management and Levin Capital Strategies.
The hires were the result of an annual review of the scheme's $8.9bn domestic equity portfolio. As part of the review, existing manager mandates were changed to "keep the portfolio in line with the system's investment strategy," Illinois TRS said.
Nine asset managers had their domestic equity mandates increased, while another three had their mandates slightly decreased. The managers with boosted mandates are: J.P. Morgan Asset Management; Loomis, Sayles; Denali Advisors; Fred Alger Management; Boston Company Asset Management; Emerald Advisors; Frontier Capital Management and Rhumbline Advisors.
LSV Asset Management lost the equivalent of 0.5% of the portfolio from its $339m mandate and the assets were shifted to Cramer Rosenthal McGlynn. Meanwhile, Turner Investment Partners and Mazama Capital Management had their mandates reduced.
Changes were also made to mandates within the $5.5bn fixed income portfolio. The pension fund committed between $250m and $275m to an emerging markets fixed income mandate run by Franklin Advisors, and gave the firm an allocation of 5% of the portfolio to run in a local opportunities portfolio. Meanwhile, Taplin, Canida & Habacht's active core-plus credit tilt portfolio was reduced by two percentage points to 5% of the portfolio, while Dolan McEniry Capital Management's similar portfolio was doubled to 5%.
TRS also committed $75m to PIMCO's Bank Recapitalisation and Value Opportunities Fund, which will invest in financial institutions looking to buy distressed or failed banks.
In private equity, TRS committed $100m to Baring Private Equity Asia, $100m to the GTCR Fund X and $75m to Stone Point Capital's Trident V fund.
The board also hired Houlihan Lokey, LP Advisors and PCG Asset Management to advise staff on a new co-investment programme within private equity.
TRS will also issue an RFP for a risk management system for the absolute return asset class. "A more rigid risk management process will allow TRS staff to assess the overall strength and weaknesses of future components of the portfolio."
Finally, TRS said its return on investments for the year ended June 30 was 13.5%, boosting the system's assets by $2.8bn. However liabilities increased by $4.8bn to $39.8bn, or 52% of all outstanding obligations.
The increase in liabilities is the result of a 26% investment loss in 2008-2009 and the subsequent sale of assets needed to make pension payments.
As a result, TRS will request $2.4bn from the state of Illinois for fiscal year 2012, an increase of $48m from the previous year.
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