Illinois TRS Expands Emerging Manager Program
Fund To Include Private Equity, Real Estate and Absolute Return
May 23, 2008
The Teachers' Retirement System of the State of Illinois (TRS) will be expanding its $500 million emerging manager program, said Eva Goltermann, spokeswoman for the $38.7 billion plan.
The program, which had earlier encompassed only the public market asset classes, will now also include investments in private equity, real estate and absolute return. Goltermann noted that up to 10% of the program could go into private equity investments.
"TRS staff will take the lead in identifying high quality, growing managers and will be assisted by the system's consultants in the various asset classes," she explained. "TRS maintains a national database of emerging managers and the system will also get input from its consultants."
R.V. Kuhns & Associates serves as the plan's general investment consultants, while PCG Asset Management and Callan & Associates serve as the plan's private equity and real estate consultants, respectively.
Meanwhile, TRS has promoted one of its bond emerging managers, Dolan McEniry Capital Management--who had previously overseen a $25 million mandate in the emerging manager program--into the main fund. The firm will manage a $170 million portfolio. Dolan McEniry was graduated into the main fund due to the firm's "competitive performance”, according to a statement issued by the TRS. Also for fixed-income, Loomis, Sayles & Company was hired for a $675 million long duration mandate.
The board has also approved two small-cap international equity hires. American Century Investments will manage a $140 million growth account, while Dimensional Fund Advisors will manage a $200 million value account. Additionally, the plan committed approximately $38.9 million to Avenue Capital Group for its European distressed debt fund.
Lastly, two firms were placed on the TRS' watch list due to performance reasons. Dodge & Cox was placed on the list for its $854 million core-plus fixed-income mandate and ING was placed on the list for a $798 million core-plus fixed-income mandate.
Kristen Harlow, spokeswoman for Dodge & Cox, declined to comment on the watch listing. Calls to Tracey Gordon, spokeswoman for ING, were not returned by press time.
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