Illinois Municipal diverts $550 mln from Pyramis

  • Illinois commits $500 million debt funds
  • LP pulling $550 million from Pyramis
  • Pension cuts exposure to domestic equities

Illinois Municipal said Pyramis fell short of its Minority, Female, Persons with a Disability-Owned Business (MFPDOB) policy that requires high-yield fixed income managers to place at least 5 percent of its brokerage commissions with brokers that meet this guideline, on an annual basis.

Pyramis will continue to manage a $784 million small cap growth mandate for the pension fund.

“While Pyramis Global Advisors does not comment on specific client relationships, we appreciate the strong relationship we’ve enjoyed with Illinois Municipal Retirement Fund over the last two decades,” according to a spokesman for the firm. “We look forward to continuing to support IMRF in the future.”

Among its new, non-core fixed income commitments, Illinois Municipal committed up to $175 million to Babson Capital Management LLC’s Babson Capital Global Loan Fund, up to $125 million to Crescent Capital Group LP’s Crescent Capital Management High Income Fund and up to $200 million to Standish Mellon Asset Management Company LLC’s Standish Emerging Markets Debt — Opportunistic Fund. It also committed an additional $50 million to its existing MacKay Shields High-Yield Bond mandate from MacKay Shields. Illinois Municipal said MacKay Shields exceeded its MFPDOB goal.

In a separate move, the fund rebalanced its domestic equities portfolio toward overseas equities and debt holdings. 

It will withdraw $410 million from its existing Progress Investment Management Domestic Equity mandate to fund $250 million to a new Progress Investment Management International Equity mandate and $160 million to a new Progress Investment Management Fixed Income mandate. Progress Investment Management Co is the manager of these programs.

Illinois Municipal currently has a 38 percent target allocation for domestic equity, but about 45 percent of its portfolio was allocated to U.S. stocks as of March 10.