On August 28, the Illinois Municipal Retirement Fund (IMRF) Board of Trustees approved multiple staff recommendations.
Domestic Equity and Fixed Income Structure
The Board approved IMRF staff recommendations to rebalance $675 million from Domestic Equity and allocate $475 million to Fixed Income and $200 million to cash.
- Withdrawal of $150 million from Holland Large Cap Growth (Holland is a MFPDOB manager)
- Withdrawal of $200 million from Wall Street Micro Cap Growth over time for cash
- Withdrawal of $125 million from Frontier Small Cap Growth
- Withdrawal of $200 million from Investment Counselors of Maryland Small Cap Value
- Withdrawal of $125 million from Sands Large Cap Growth
- An additional allocation of $150 million to Garcia Hamilton Core Fixed Income (Garcia Hamilton is a MFPDOB manager), subject to satisfactory legal due diligence;
- An additional allocation of $125 million to Babson Global Loan Fund, subject to satisfactory legal due diligence;
- An additional allocation of $200 million to Progress Fixed Income (Progress is a MFPDOB manager), subject to satisfactory legal due diligence;
- An additional allocation of $125 million to the NTI S&P Value Index.
The withdrawals and additional allocations will help IMRF reduce the overweight to domestic equity and move closer to the +/-4% range, reduce the small cap and growth biases by moving closer to the US Equity benchmark (Russell 3000), improve the participation of MFPDOB managers, and increase exposure to fixed income which is currently underweight (26.3% versus target of 27% )
The Board approved:
An additional commitment of $10 million to Vistria Fund, L.P.
Vistria is an existing IMRF manager and an Illinois based private equity firm, with a minority, female, and persons with disability (MFPDOB) ownership. It targets lower middle buyout investments and focuses its investing in healthcare, education and financial service middle market companies.
This additional commitment will help IMRF strategically grow its allocation to private equity.
The IMRF portfolio has a 9% target allocation to alternative investments. IMRF’s actual allocation to alternative investments is 4.3% (6.2%, including unfunded commitments) as of June 30, 2015.
(As of June 30, 2015, the IMRF total portfolio was valued at $35.6 billion)