Administration February 20, 2009

Illinois TRS Reshuffles Fixed Income, Boosts Private Equity

February 20, 2009 (PLANSPONSOR.com) - The Board of the Teachers' Retirement System of the State of Illinois (TRS) terminated ING Investment Management's $450 million fixed income core-plus mandate.
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According to a TRS announcement, ING had been on watch since May 2008 due to performance and organizational concerns. The TRS said proceeds from the termination will be distributed to fixed income managers whose mandates are underweight relative to their target allocations.

The TRS Board also approved the placement of the following managers to its watch list, all for performance reasons:

  • Goldman Sachs, which manages a $1 billion fixed income mandate for TRS;
  • PIMCO StocksPlus, which manages $551 million in enhanced index domestic equity for TRS;
  • Quantitative Management Associates, which manages $271 million in enhanced index international equity for TRS;
  • Trilogy Global Advisors, a firm managing $248 million in large cap growth   international equity for TRS; and
  • Turner Investments, which manages $549 million in large cap growth domestic equity for TRS.

Meanwhile, Jarislowsky Frasier, which manages $272 million in large cap growth international equity for TRS, and Western Asset Management Company, which manages a $301 million global inflation linked portfolio for TRS, were removed from the watch list, the announcement said.  

In addition, the Board approved commitments to private equity, all funded by cash and passive/enhanced index accounts: up to $10 million to MatlinPatterson Preferred Partners Fund II, a buyout fund; and $25 million to MBK Partners Fund II, L.P., an Asian buyout fund.

The Board of the Teachers' Retirement System of the State of Illinois (TRS) selected firms to serve on its transition managers panel, following a Request for Proposal process announced last November (see Illinois Teachers to Conduct Transition Search ). The firms selected were State Street Global Markets, Barclays Global Investors, Morgan Stanley, Goldman Sachs, BlackRock, and JPMorgan.

The Board issued a request for proposal for a real estate insurance consultant as a part of a periodic rebidding, with selection expected at the May TRS Board of Trustees meeting, according to a TRS press release.

TRS also announced the termination of the $105 million commodities portfolio held by Neuberger Investment Management and the award of the mandate to Gresham Investment Management. Previously, the TRS Board terminated a $903 million fixed income, enhanced index mandate with Neuberger and awarded it to Prudential Fixed Income Management (see State Street, Prudential Win Illinois TRS Business ).

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