Illinois Teachers’ backs Goldman’s new fund

The US pension has made a chunky investment in infrastructure despite having not found the asset class “comparatively attractive” in the past.

The trustees of the Teachers’ Retirement System (TRS) of the State of Illinois have approved a $150 million commitment to West Street Infrastructure Partners Fund III, the latest infrastructure fund being raised by Goldman Sachs.

The investment will be made through the pension’s $4.2 billion Real Return portfolio, since Illinois Teachers’ does not have a separate portfolio dedicated to infrastructure.

TRS also does not have a specified target for infrastructure. “Infrastructure is a segment of the private markets that in the past TRS has not found to be comparatively attractive for the TRS portfolio,” Dave Urbanek, the pension plan’s spokesperson, told Infrastructure Investor in an e-mailed response.

“This investment with Goldman Sachs is with the System’s Real Return portfolio,” he said, which includes commodities and global inflation-linked securities, among other investment strategies.

Asked why Illinois Teachers’ chose to invest in this particular infrastructure fund, Urbanek said: “The TRS Trustees and investment staff determined that this particular fund was a good fit for the System’s overall portfolio.”

West Street Infrastructure Partners III is the successor to Goldman Sachs Infrastructure Partners II (GSIP II), a vehicle the Wall Street investment bank closed in 2010 on $3.1 billion.

Goldman Sachs would not comment for this story but according to media reports, the bank’s asset management division is looking to raise $3 billion for its third fund, which will focus on energy and transportation infrastructure projects.

Based in Springfield, Illinois, TRS provides retirement, disability and survivor benefits to teachers, administrators and other public school personnel employed outside of Chicago. It serves 395,000 members and as of April 30, 2015, its portfolio stood at $45.9 billion.