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Illinois Teachers now backing ‘emerging managers’

The $41.7bn retirement system expands its emerging managers program to include private equity and real estate firms, allocating 10 percent to the asset classes.

The $41.7 billion (€26.7 billion) Illinois Teachers’ Retirement System (TRS) has expanded its emerging managers allocation to include budding private equity and real estate firms.

The $500 million programme, formerly restricted to the public market asset classes, will now target buyout, mezzanine, real estate and distressed debt groups that have less than $500 million in capital commitments and raised fewer than three institutional funds, according to a TRS spokeswoman.

The public pension, which manages the retirement assets of more than 344,000 teachers and school officials, has already committed $130 million to emerging managers focused on public equity investments. TRS intends to commit up to 10 percent of the overall emerging managers programme to private equity and real estate firms.

TRS allocated roughly $2.2 billion towards private equity last year, equaling 5.2 percent of its total fund and producing a return of 30.9 percent.  Real estate enjoyed an 11 percent allocation and a 22.7 percent return.