OAK BROOK, Ill. – On Friday, the Illinois Municipal Retirement Fund (IMRF) Board of Trustees approved up to $115 million in commitments within the Private Equity asset class, of which $50 million or 43% was committed to a minority-owned firm. Within the Real Estate asset class, the Board approved a commitment of up to $75 million. The Board also approved the Strategic Asset Allocation, Investment Committee Charter and Statement of Investment Policy.
The Board approved the following commitments, subject to satisfactory legal due diligence:
Private Equity
- Up to $50 million to Clearlake Opportunities Partners III, L.P. IMRF is an existing investor in Clearlake funds, through IMRF’s direct access program and separately managed accounts, totaling $346.9 million in aggregate commitments. Clearlake qualifies as a Latino-owned firm, as defined by the Illinois Pension Code.
- Up to $65 million to the following New Enterprise Associates (NEA) funds: NEA 18, L.P. ($20 million), NEA 18 Venture Growth Equity, L.P. ($30 million), and up to $15 million in co-investment opportunities generated by the two funds. IMRF is an existing investor in NEA funds, through IMRF’s separately managed accounts, totaling $50.5 million in aggregate commitments.
Real Estate
- Up to $75 million to TA Realty Value-Add Fund XIII, L.P. IMRF is an existing investor in TA Realty funds, totaling $547.5 million in aggregate commitments.
Asset Allocation Review
The Board conducted its annual review of the asset allocation and approved adjustments to the asset classes, asset allocation targets, and policy benchmark. The following changes to the portfolio’s asset allocation, effective March 1, 2022, are:
- Reduce Domestic Equity asset class target from 39% to 35.5%
- Increase International Equity asset class target from 15% to 18%
- Increase Fixed Income asset class target from 25% to 25.5%
- Decrease Alternative Investments asset class target from 10% to 9.5%
- Change the Real Estate asset class to Private Real Assets with a target of 10.5%
The target allocation for cash holdings will remain at 1% of the portfolio.
The fund’s policy benchmarks as of March 1, 2022:
- 35.5% Custom U.S. Equity Benchmark
- 18% MSCI AC World Index ex USA (Net)
- 25.5% Custom Fixed Income Benchmark
- 9.5% Custom Alternative Investments Benchmark
- 10.5% Custom Private Real Assets Benchmark
- 1.0% 3 Month T-Bills
Investment Committee Charter and Statement of Investment Policy
The Board approved the recommended changes to the Investment Committee Charter and Statement of Investment Policy. Highlights of the recommended changes include:
- Increase the minority investment manager goal for the Fixed Income asset class to 35% from 32%
- Increase the minority investment manager goal from Private Equity to 25% from 22%
- Update the 2022 Asset Allocation targets, asset classes, and Fund’s Policy Benchmark
- Allow staff to accept co-investment opportunities at the approval of the Chief Investment Officer on a pro-rata basis
- Update the exposure to non-U.S. strategies in the Alternative and Real Asset classes to 35%
As of December 31, 2021, the total IMRF portfolio was valued at $56.8 billion.
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