Illinois Municipal Retirement Fund Seeks Real Estate Managers

The Illinois Municipal Retirement Fund, a $54.9 billion public pension fund, is seeking a manager that operates a residential real estate strategy, according to a request for proposal issued Monday.

The fund may consider multiple managers and anticipates committing at least $50 million per strategy. The fund will only consider closed-ended funds.

Requirements for managers include having at least 75% of capital invested in real estate properties, with a proven track record in the strategy. Prospective firms should have at least $250 million in assets under management, according to the RFP.

“Single or multiple strategy equity funds focused exclusively on residential real estate including but not limited to affordable housing, workforce housing, student housing, manufactured housing, single family build to rent, and senior housing will be considered,” the RFP states.

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Proposals from prospective managers are due by November 22. The fund anticipates selecting a manager by February 21, 2025, with finalists presenting to the IMRF investment committee the day prior.

The fund will consider four primary factors in its manager selection:

People, including the stability and ownership of a firm; the reputation, experience and tenure of its professionals; and its record of integrity and business ethics;

Process, seeking a clearly defined, reasonable and repeatable investment strategy;

Performance, based on documented investment performance relative to benchmarks and peers; and

Pricing, based on the firm’s fees and costs.

The IMRF allocates 36.5% of its portfolio to domestic equity, 22.3% to fixed income, 19.7% to international equity, 11.3% to alternative investments, 9.4% to private real assets and 0.8% to cash and cash equivalents.

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Tags: Illinois Municipal Retirement Fund, IMRF, Manager selection, Real Assets, Real Estate

Deutsche Bank’s pension scheme for the bank’s U.K. employees completed a 1.1-billion-pound ($1.43 billion) annuity buy-in with Legal & General Assurance. The pension risk transfer transaction will cover 4,000 of the bank’s plan beneficiaries, the insurer announced Tuesday.

The transaction is the plan’s third buy-in, in which the pension fund’s liabilities are offloaded to the insurer. In 2021, the bank completed a 570-million-pound buy-in, followed by a 500-million-pound buy-in last year. In total, Deutsche Bank has offloaded 2.1 billion pounds in liabilities to Legal & General.

L&G and Deutsche Bank implemented a phased buy-in strategy over the past four years to fully insure all benefits, according to the news release.

“We are delighted to have completed this full buy-in of the [pension fund’s] liabilities with Legal & General to further improve the security of members’ benefits, said Michael Wrobel, chair of the trustee board of Deutsche Bank’s U.K. pension scheme. “The existing relationship with Legal & General has been fundamental in helping us achieve this and allowed us to move quickly to lock in attractive pricing for this and previous transactions.”

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As of the most recent PRT transaction, which was completed earlier than planned, all of Deutsche Bank’s pension fund liabilities will be insured, noted Jeremy Sowden, head of global pensions and benefits at Deutsche Bank AG.

“The Bank and Trustee took the opportunity presented by market conditions to fully insure accrued liabilities much earlier than previously planned, and the resulting successful transaction represents an important milestone in our global strategy to manage defined benefit scheme risk,” Sowden said.

The pension risk transfer market in the U.K. has seen record transaction volume in recent years. In the U.K., according to Legal & General, 49.1 billion pounds in PRT volume occurred in 2023. In 2022, 28.1 billion pounds in volume was recorded, and 27.7 billion pounds in 2021.

In the first half of 2024, approximately 20 billion pounds in pension risk transfers have been completed in the U.K. market according to Legal & General in its U.S. and U.K. September PRT monitor report. The firm projects more than 40 billion pounds in transactions for the full year.

“The total market volume in 2024 is likely to exceed £40 billion, making it one of the largest years on record,” the report stated. “The longer-term pipeline is the largest we have ever seen, and we continue to expect elevated PRT volumes over the next decade.”

The transaction with Deutsche Bank is among Legal & General’s largest in the U.K. The insurer completed a 1.1-billion-pound buy-in with the SCA U.K. pension plan in August and a 900-million-pound buy-in with the ICI pension fund in May.

L&G reported, in its half-year results, that the firm has written or is in exclusive negotiations on 5 billion pounds of PRT transactions. In June, the firm announced plans to close between 50 and 65 billion pounds of PRT transaction volume by the end of 2028.