Illinois Municipal Retirement Fund bets $650 mln on infrastructure

  • IMRF backs Oaktree, Partners Group private funds
  • $37.6 bln retirement system launched its infrastructure search in February
  • Trump’s infrastructure plan to emerge in coming weeks, says Carlyle’s Youngkin

Illinois Municipal Retirement Fund greenlit up to $650 million in infrastructure commitments at its meeting last week, the $37.6 billion retirement system said.

IMRF committed $100 million each to private infrastructure funds raised by Oaktree Capital Management and Partners Group, along with $450 million to publicly listed vehicles managed by Brookfield Asset Management and Cohen & Steers. Fund targets for the Oaktree and Partners Group pools could not be found.

The retirement system in February launched a process to seek out investment opportunities in infrastructure. The new commitments were announced following its May 19 meeting.

Illinois’s commitments come as a growing number of institutional investors are boosting their exposure to infrastructure assets, which often include transportation-related projects that are traditionally the purview of state and local governments. Over the weekend, Blackstone Group said it had received commitments of $20 billion from Saudi Arabia’s sovereign-wealth fund for infrastructure investments.

More than 30 states are now allowing public-private partnerships to fund new infrastructure projects, or to reinvigorate older roads and facilities, according to American Investment Council research published in May. Advocates for public-private partnerships say the inclusion of private capital alleviates public funding shortfalls, while opponents cite political concerns.

“Despite this bipartisan acknowledgement, the growing debt burden and curbed government spending have reduced funds the federal government is able to commit to infrastructure projects. Locally, states and municipalities lack adequate resources to make investments to modernize and improve their infrastructure systems,” the American Investment Council wrote in its report.

Investor interest was spurred in no small part by bipartisan support for infrastructure spending, a rare place where Republican President Donald Trumpand congressional Democrats found some common ground. Trump’s $1 trillion infrastructure plan has been put on the back burner by his effort to repeal Obamacare and pass comprehensive tax reform, as well as the ongoing furor surrounding his campaign’s alleged ties to the Russian government and the firing of FBI Director James Comey.

Last week, Carlyle Group’s Glenn Youngkin told CNBC that the specifics of Trump’s infrastructure plan could emerge in the coming weeks.

“They expect to send principles to the Hill in the next few weeks. And those principles will really lay out what the hierarchy of expectations are for [an] infrastructure bill,” Youngkin said during a segment on the program Squawk Box. “Then, of course, Congress has to go to work.”

Illinois Municipal Retirement Fund held roughly 3.4 percent of its investment portfolio in alternative assets, which includes private equity and other private market funds. The alternative asset portfolio was valued at around $1.3 billion as of March 31.

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