Louisiana Teachers seeks manager to oversee private investments

  • AUM: $19.5 bln
  • RE allocation: 9 pct; target 10 pct
  • PE allocation: 15 pct; target 14 pct
  • Whom to contact: Lisa Honore at lisa.honore@trsl.org
  • Investment Adviser: Hamilton Lane

Teachers’ Retirement System of Louisiana is looking for a consultant to manage its private-markets investments, including PE, private debt and real assets,

The $20 billion system currently employs Hamilton Lane as its private-markets manager and is looking to award a new five-year contract after the current contract expires at the end of 2019.

Louisiana Teachers has an aggregate allocation target of 35.5 percent for private-markets investments.

The private-markets manager will have discretionary investment authority over the pensions’ private equity and real-asset investments, coordinating with investment staff and the Louisiana Teachers board, the RFP shows. The manager will also be responsible for creating an annual strategic plan and pacing schedule for each of the private-asset classes.

The manager will report primarily to TRS Louisiana’s CIO and deputy CIO, and will typically meet with the board monthly. The private-markets manager will typically do due diligence on potential investments, select investments and funds for Louisiana Teachers, get approval from the investment staff and board, and then execute the investments, the RFP says.

While the private-markets manager will have broad discretion, it will be bound by the pension’s investment policy and the board will have the right to veto any investments the manager presents, according to the RFP.

Louisiana Teachers plans to allocate more than a third of its portfolio to private markets, with targets of 11 percent equity, 8 percent private debt, 3 percent venture capital, 5 percent core real estate, 5 percent opportunistic and value-added real estate, 1.5 percent infrastructure, 1 percent commodities, and 1 percent farmland.

The asset-allocation targets are set by Louisiana Teachers’ general investment consultant, currently Aon Hewitt Investment Consulting, and were last updated in June 2016.

Louisiana Teachers may award a single contract that covers both PE and real assets, or two separate contracts.

TRS Lousiana is seeking bids from firms that have at least $1 billion in assets under discretion and $15 billion in assets under advisement for PE and private-debt assets.

For real assets, bidders should have at least $5 billion in assets under advisement.

Proposals are due by May 6. Louisiana Teachers intends to award a contract that runs from Jan. 1, 2020, through Dec. 31, 2025.

Action Item: View the private markets manager RFP here https://bit.ly/2G3Wm3d