Illinois Municipal hikes PE target

Retirement systems ponder their next steps in setting targets in a volatile climate.

Illinois Municipal Retirement Fund will increase its target allocation to alternative investments over the next three years.

The move is somewhat unusual at a time when many public systems are downshifting their pace of private equity commitments to counter overweight exposures to the asset class. Most systems are maintaining their exposures even as they slow their pace, though a handful are hiking allocation targets to help rebalance amid overweight exposure.

Another system that raised its target recently was Montana Board of Investments which will increase its private equity target by one percent next year.

Illinois Municipal’s board approved its long-term asset allocation policy plan, which will hike its target to alternative investments to 14 percent over the next three years, according to a press release detailing actions taken at the $47.3 billion system’s December meeting.

The system currently targets a 9.5 percent allocation.

According to the release, the alternative investment target will rise to 11.5 percent at the start of 2023.

Illinois Municipal will reduce its targets to US equities and fixed income over the same time period, the release said.

The system also announced the following private equity commitments:

• Up to $25 million to Accel-KKR Capital Partners VII
• Up to $25 million to Accel-KKR Emerging Buyout Partners II
• Up to $40 million in ABRY Secured Credit Opportunity Fund