Illinois to increase PE target allocation

Illinois State Board of Investment will increase its private equity target allocation to 10 percent in 2023.

Multiple public pension systems have hiked their future targeted allocations in recent months. Many systems have had their private equity allocations ramp beyond policy limits amid public market declines, and some have chosen to boost their allocation targets to get into compliance.

It’s not clear if Illinois jacked its allocation because of over-allocation potential. In fact, the system has had a long-term goal of building exposure to private equity and private credit, according to the system’s investment adviser Meketa. The system expects a boost in returns from greater exposure to both strategies, Meketa’s report said.

Illinois approved a recommendation from Meketa to raise its target allocation from 9 percent to 10 percent next year, according to a presentation made at the $23.4 billion system’s board meeting held on September 30.

Buyouts reviewed the presentation and board packet following an open records request. Illinois currently allocates 8 percent to private equity.

Illinois made 14 commitments to private equity funds totaling $450 million through August of this year, according to other documents included in the board packet.

The system uses Franklin Park and Hamilton Lane as private market consultants. According to board packet documents, Illinois made seven commitments through each consultant.

The commitments made include:

• $35 million to Banneker II
• $30 million to RiverGlade II
• $35 million to Astara I
• $20 million to Clarendon I
• $35 million to Enlightenment IV
• $35 million to Sunstone III
• $35 million to Fort Point III
• $30 million to HL CV Vehicle Series 2022
• $35 million to Kelso Investment Associates XI
• $35 million to Gridiron Capital Fund V
• $20 million to Oak HC/FT V
• $35 million to Platinum Equity Capital Partners VI
• $35 million to EQT X
• $35 million to Eighth Cinven Fund