Illinois Teachers Up Thier PE

The $31.5 billion Illinois Teachers’ Retirement System is gearing up to commit $400 million to private equity investments during its upcoming fiscal year, which begins July 1.

John Day, plan spokesman, says that the fund currently has $800 million invested in private equity, and the planned increase in private equity allotment is from 3% to 6%.

The new allocation would dedicate $125 million to venture capital investments; $150 million to buyout vehicles; $50 million to “special situation” investments, which Day described as industry-specific funds; $50 million to distressed debt investments and $25 million to subordinated debt investments.

Funding for the commitments would be gleaned from the plan’s over-weighting in domestic equity.

“The allocation might be more or less depending on how the markets look,” Day says. He adds that the plan would not announce searches and would instead investigate opportunities with the assistance of Callan Associates.

Meanwhile, the plan has placed Ariel Capital Management and J&W Seligman on watch for performance issues on their respective $379 million small-cap value and $258 million mid-cap growth accounts. Day declined to elaborate on the managers’ watch status, but says that they had under performed their respective benchmarks.

The plan also hired Turner Investment Partners and Sands Capital Management to each oversee $365 million in large-cap growth accounts. The hires replace MFS Investment Management, which was reportedly terminated in February.

Callan assisted with the searches.

This story originally appeared in Investment Management Weekly, an affiliated publication.