Alternative Investments: Illinois TRS Allocates $665 Million to Alt Funds

December 12, 2019 | Alternative Investments
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Illinois Teachers’ Retirement System, Springfield, committed a total of $665 million to six alternative investment funds.

The $ 52.3 billion Illinois Teachers Retirement System (TRS) allocated $ 665 million to alternative investment funds based on decisions taken by the investment officers of the fund.

Real estate

TRS committed $ 221 million to the Exeter Europe Industrial Core Fund and $100 million to Exeter Industrial Value Fund V. These funds invest in industrial real estate.

Private equity

TRS will allocate $ 125 million to RCP Multi-Feeder SBO 1.0, a separately managed private equity fund-of-funds.

Further, an amount of $ 44 million was committed to SKCP Catalyst Fund 1-A. The fund invests in the lower middle market in the specialty materials, chemicals, and pharmaceutical sectors.

Private debt

TRS investment officers decided to invest $ 125 million into the Apollo Revolver Fund. This fund has the mandate to invest in sub-investment grade revolving credit facilities.

Additionally, TRS allocated $ 50 million to the Solar Capital Partners Private Corporate Lending Fund platform.

Illinois TRS: Returns during the fiscal year 2018

Teachers’ Retirement System investments generated a positive 9.2 percent rate of return, gross of fees, (8.5 percent net of fees) during the fiscal year 2018.

Further, at the end of FY 2018, TRS maintained about 35.9 percent of its investments in publicly-held companies globally, approximately 23 percent in bonds and other fixed-income securities, approximately 14 percent in real estate worldwide, approximately 13.2 percent in private equity and the balance in various alternative investments, including hedge funds and commodities.

Illinois TRS: Unfunded liabilities

Separately, the Illinois State Commission on Government Forecasting and Accountability issued the November Special Pension Briefing on State-funded retirement systems.

The total unfunded liabilities of the State systems totaled $137.2 billion on June 30, 2019, the largest amount ever.

Moreover, it was led by the Teachers’ Retirement System (TRS), whose unfunded liabilities amounted to $78.1 billion. As the largest of the State systems, TRS accounts for approximately 56.9% of the total assets and liabilities of the five State systems combined.

[Related Story:  Illinois Teachers’ Retirement System Bets Big on Alternatives   ]

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