The Teachers’ Retirement System of the State of Illinois in late May upped its target allocation to private equity to 10 percent from 8 percent. In addition, the limited partner made three private equity pledges totaling $175 million and is trying to fill two staff positions and hire a consultant.
The LP made other adjustments to its target asset allocations as well. The changes “are designed to optimize investment returns with modest risk,” said Stan Rupnik, the pension fund’s acting executive director and CIO, in a prepared statement.
On the investment front, the state pledged to two distressed debt managers and an energy-focused shop. Blackstone/GSO Capital Solutions Fund LP, a distressed debt fund designed to provide financial solutions to companies, received a $100 million slug. A $25 million commitment went to Clearlake Capital Partners II LP, a distressed debt fund that is part of the state’s emerging managers program. Clearlake Capital Partners takes control positions in small and mid-size North American companies and tries to enhance them using financial, operational or structural improvements. The state also made a $50 million pledge to Energy Capital Partners II LP, a buyout fund that invests in North American energy infrastructure opportunities, mainly in the power generation, renewable, electric transmission and midstream gas sectors.
In other news, the LP has issued an RFP for an executive search firm to identify candidates for the executive director position in an effort to replace Jon Bauman, who resigned in April. Responses are due on June 12. The pension fund is still interviewing candidates to replace Lamar Villere, formerly its senior alternative investments officer, who left earlier this year to lead the Tennessee Consolidated Retirement System’s private equity investment program. A search is also underway for a general investment consultant.
The pension fund has $27.2 billion in assets. It had an actual private equity allocation of 8.7 percent at the end of December.