Ill. TRS To Commit Up To $1.1B; May Sell Some Interests

The Teachers’ Retirement System of the State of Illinois intends to commit $700 million to $1.1 billion to private equity over the course of its new fiscal year, and may also sell some interests in older funds, according to the pension’s new tactical plan. The pension fund’s fiscal year began July 1.

Should it even hit the low end of its target commitment range, the $34 billion pension fund will have reached its target allocation to the asset class of 10 percent. The actual allocation now stands at 8 percent.

Areas of special interest include North American small and mid-market, sector-focused buyout funds; global corporate finance funds, especially those operating in Europe and Asia; and opportunistic direct co-investments.The pension fund is searching for an adviser to help run the co-investment program, which will likely account for about 10 percent of the limited partner’s total annual private equity commitments.

Spokesperson Dave Urbanek added that between 12 and 16 commitments will be made with the $700 million to $1.1 billion.

The new tactical plan also calls for “the development of a process that enables TRS to review and take advantage of secondary opportunities” and for “the review of older private equity investments with an eye toward selling some of these assets.”

In addition, the LP recently announced a $75 million commitment to Energy Investors Funds’s United States Power Fund IV LP, earmarked for investments in the power and electric utility industry, and an additional $50 million to Blackstone/GSO Capital Solutions Fund, a distressed debt fund, bringing the total pledge to that fund to $150 million.

Pledges made in 2009 include ones to Clearlake Capital Partners II, which takes control stakes in small and mid-sized North American companies; mezz vehicle Maranon Mezzanine Fund; distressed fund MatlinPatterson Preferred II; Asian buyout fund MBK Partners Fund II; buyout fund Onex Partners III LP; and technology-focused venture capital fund Starvest Partners LP.

In other news, the pension rehired PCG Asset Management as its private equity consultant, a role it has held since 2007. PCG beat out six other firms for the spot.