Illinois Municipal commits $277 million to Europe, emerging markets

All three European commitments marked new, direct investments from the pension system, according to a statement following its Aug. 22 meeting. Two of the three European investments went to funds managed by London-based Inflexion Private Equity, a specialist in mid-market buyouts.

The IMRF said the actions will boost its allocation to alternative investments, currently at 5.7 percent, but targeted at 9 percent. 

”The new commitments will help IMRF reach its target asset allocation to alternative investments, while also increasing the diversification of the private equity portfolio through exposure to international investments,” the IMRF said in a statement emailed to Buyouts.

In the largest of its three European commitments, the retirement fund’s board of trustees approved a 33 million euro ($56.1 million) pledge to Inflexion Buyout Fund IV LP, which targets mid-market buyouts, primarily in the U.K.

The IMRF also committed up to 22 million euros to Inflexion Partnership Capital Fund I LP, a vehicle aimed at mid-market growth equity and structured minority investments, primarily in the U.K.

Third, the pension system committed about 25 million euros to Doughty Hanson Fund VI LP, which is set to invest in mid-market buyouts in Western Europe. The fund is managed by Doughty Hanson & Co, which has been handling private equity deals for 25 years and specializes in targets at the upper end of the European middle market, according to the firm’s website.

In a separate move, the IMRF funded an additional $150 million to Genesis Emerging Markets Commingled Fund, a pooled trust for public pension funds managed by London-based Genesis Investment Management LP. As of June 30, the fund turned in a gain of 8.1 percent in the second quarter, ahead of the 6.7 percent return from the MSCI EM index and the 5.1 percent rise from the MSCI World index, according to a performance update.

IMRF has been an investor in Genesis Emerging Markets Commingled Fund since 2004. “The fund’s performance has been strong, and institutional demand is high,” the IMRF said in a statement. IMRF had $547 million invested in the fund as of June 30.