PensionsJuly 20, 2023

Illinois Teachers’ Pension Seeks Diversifying Strategies Consultant

The Illinois TRS is also looking to hire a new investment officer and plans to open a Chicago office.

Reported by Michael Katz

The $64 billion Teachers’ Retirement System of the State of Illinois has issued a request for proposals seeking ongoing consulting services for its $3.5 billion diversifying strategies portfolio.

According to the RFP, the pension fund is looking for a firm to help form a concentrated approach for the portfolio, which “will likely entail a combination of incremental funding of existing managers and the addition of attractive direct investments that will complement the portfolio.”

Illinois TRS’ diversifying strategies asset class has a fund level target of 4% of total plan assets and currently consists of one fund of funds relationship, while the remainder are direct relationships. According to the RFP, the consultant will have a non-discretionary advisory relationship with the pension fund and will assist staff and the TRS Board of Trustees with managing the portfolio. Responses to the RFP are due by August 15 at 2 p.m. CDT.

The consultant will act as a fiduciary to the TRS and will be tasked with:

Providing input to capital market assumptions, including risk, return and correlation, for the asset class, including supporting research and industry perspective;
Reviewing TRS investment policy and recommendations for revision as necessary related to diversifying strategies investments;
Providing insight into industry trends, as well as products and strategies in which TRS may not currently invest;
Performing initial and ongoing due diligence of investment managers or funds and verifying that all manager activity is lawful, ethical, reasonable and in the best interest of TRS;
Monitoring and reporting the performance of diversifying strategies investments;
Creating a custom benchmark for the portfolio and analyzing quarterly benchmarks across the entire TRS diversifying strategies portfolio as applicable;
Providing reports to staff and/or the board that include a detailed review of performance, attribution and relevant comparison to similar funds and the overall hedge fund universe;
Identifying areas of heightened risk or new opportunities;
Working with staff to select and implement a performance monitoring infrastructure for the diversifying strategies portfolio; and
Working with staff to develop monthly reporting standards and guidelines.

The TRS also is looking for a new investment officer to assist in coordinating and monitoring investments; to conduct thorough analysis and due diligence; and to produce quantifiable recommendations supported by research. The position is based in the pension fund’s Springfield, Illinois, office, but the job listing indicates the pension fund is also opening a Chicago office, where the position may be located.

According to the posting, the position requires a thorough knowledge of general investment theory, with particular emphasis on the specific asset class to which they are assigned. The pension fund did not specify the asset class but added that candidates will be expected to work across all asset classes.

TRS investment officers work in one of the following asset classes:

Public equity – domestic and international equities;
Global income, such as public income investments and private credit;
Private equity, including buyout, venture capital, distressed debt and co-investment programs;
Real assets, including direct real estate, private equity real estate and infrastructure; and
Diversifying strategies, which includes other alternatives that seek low correlation to traditional asset classes.