OAK BROOK, Ill. – On Friday, the Illinois Municipal Retirement Fund (IMRF) Board of Trustees approved up to $252.4 million in commitments within the Private Equity and Real Estate asset classes, of which $105 million or 42% was committed to minority-owned firms. The Board also approved a resolution authorizing IMRF’s continued divestment of Russian assets.
The Board approved the following commitments, subject to satisfactory legal due diligence:
Private Equity
- Up to $75 million to Valor Equity Partners VI, L.P. IMRF is an existing investor in Valor funds, totaling $205 million in aggregate commitments. Valor qualifies as a Latino-owned firm, as defined by the Illinois Pension Code.
- Up to $50 million to Waud Capital Partners VI, L.P. IMRF is an existing investor in Waud funds, totaling $79 million in aggregate commitments.
- Up to $25 million to FirstMark Capital VI, L.P. and up to $25 million to FirstMark Capital OF IV, L.P. IMRF is an existing investor in FirstMark funds, totaling $2.5 million in aggregate commitments.
- Up to $25 million to BPOC Fund VI, L.P. IMRF is an existing investor in BPOC funds, totaling $30 million in aggregate commitments.
Real Estate
- Up to $30 million to Newport Capital Partners Fund III, L.P. IMRF is an existing investor in Newport funds, totaling $24.9 million in aggregate commitments. Newport qualifies as a firm owned by a person with a disability, as defined by the Illinois Pension Code.
- Up to €20 million (approximately $22.4 million) to Ares Project Horizon Co-Investment. IMRF is an existing investor in Ares funds, totaling $438 million in aggregate commitments.
Asset Allocation Implementation
IMRF’s new Strategic Asset Allocation Policy was authorized by the Board on February 11, 2022. Staff proposed an implementation framework to achieve compliance with the Board approved Strategic Asset Allocation Policy targets.
The Board approved the following actions, subject to satisfactory legal due diligence and suitable liquidity/market conditions:
- Termination and full withdrawal of the NTI S&P Growth Index account (approximately $3.4 billion).
- Termination and full withdrawal of the Standish-Mellon (Insight) Emerging Markets Debt account (approximately $200 million).
- Allocation up to $200 million to Brookfield Global Listed Infrastructure.
- Allocation up to $200 million to Cohen & Steers Global Listed Infrastructure.
- Allocation up to $1.0 billion to IMRF Factor Diversity Portfolio.
- Allocation up to $500 million to IMRF Scientific Beta HFI Portfolio.
- Allocation up to $1.0 billion to Barings Global Loan Fund.
- Allocation up to $300 million to MacKay Shields High Yield Bond.
- Residual cash from redemptions utilized to fund benefit payments, Private Markets investments, and liquidity needs as necessary.
Russian Divestment
The Board passed a resolution authorizing staff to complete the orderly and prudent divestment of any remaining Russian investments, in a manner consistent with staff’s fiduciary duties and with the goal of reducing risk and potential loss to the IMRF portfolio.
As of March 9, IMRF held approximately $23 million in Russian investments, representing about 0.04% of the total portfolio.
“The IMRF Board condemns the actions taken by Russia and applauds the multitude of global responses in the form of humanitarian aid and sanctions,” according to an excerpt from the resolution.
Report on 2021 Diverse Manager Program
2021 Minority & Emerging Investment Manager Utilization Report highlights include:
- At the close of 2021, minority-owned firms managed $13.4 billion of the total portfolio, which was a 21.2% increase in total assets compared to the year prior.
- At the close of 2021, minority-owned firms managed 23.5% of the total fund’s market value and 27.5% of IMRF’s actively managed assets (excluding index investments).
- IMRF has direct relationships with minority-owned investment firms across all five of the fund’s asset classes.
- IMRF leverages manager-of-managers/fund-of-funds to invest with minority-owned investment firms in the international equity, fixed income, real estate, and alternative asset classes.
Report on 2021 Minority Broker Program
2021 Minority Broker Utilization Report highlights include:
- IMRF exceeded its minority brokerage goals by each asset class.
- IMRF’s investment managers traded with 38 minority broker/dealers.
- IMRF’s Equity portfolio generated $24.8 million in commissions. Of that amount, minority broker/dealers earned $6.8 million or 27.5% of the total commissions.
- IMRF’s Fixed Income portfolio traded 112.5 billion par value. Of that amount, minority broker/dealers executed trades totaling 6.4 billion or 5.7% of the total par value.
Report on 2021 Security Lending Program
2021 Security Lending Activity Report highlights include:
- During 2021, IMRF generated approximately $5.7 million across separately managed accounts.
- IMRF’s total security lending income, inclusive of commingled funds, amounted to $7.7 million.
- Both IMRF and Northern Trust actively monitor the security lending program via established protocols and procedures.
As of January 31, 2022, the total IMRF portfolio was valued at $54.7 billion.
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