Illinois Teachers’ to overhaul private equity

The Illinois Teachers Retirement System is expanding its private equity program to include significant co-investments, secondaries and international investment capabilities.

The pension also is reviewing its “older” private equity investments “with an eye toward selling some of these assets”, the pension said in a statement.

The $33.7 billion pension, which is set to spend between $700 million and $1.1 billion on private equity in fiscal 2011, re-signed PCG Asset Management as its private equity advisor earlier this year. PCGAM has worked as Illinois Teachers’ private equity consultant for three years.

PCGAM will help the pension implement the new “tactical plan” for its $2.7 billion private equity portfolio. Under the plan, co-investments would account for about 10 percent of the pension’s private equity programme.

The plan also includes developing international private equity investment capabilities, building secondaries capabilities and strengthening the pension’s commitment to the small- and mid-market.

Numerous US pensions have asked advisors to help build secondaries capabilities, including New Jersey’s and Tennessee’s state pensions.

Illinois Teachers recently committed $75 million to Energy Investors Fund United States Power Fund IV, and increased its initial $100 million commitment to Blackstone’s GSO Capital Solutions Fund to $150 million. EIF is targeting $1.75 billion, and had raised $455 million as of the beginning of July, according to a filing with the US Securities and Exchange Commission.