Illinois Teachers’ Asks Funds Of Funds For Help In Single-Manager Search

Aug 6 2010 | 11:08am ET

The Illinois Teachers’ Retirement System plans to expand the number of single-manager hedge funds it invests in from one to as many as a baker’s dozen. And the $33.1 billion pension is turning to its fund of hedge funds managers for help.

Rather than an open search and request for proposals, Illinois Teachers’ has asked K2 Advisors and Grosvenor Capital Management to work with the plan’s staff to come up with a 15 to 20 hedge fund shortlist. The pension will then invest in between two and four new hedge funds every year over the next two to three years, Pensions & Investments reports, following a rigorous due-diligence process.

Illinois Teachers’ plans to invest in equity and credit strategies first, according to P&I. The pension made its first direct hedge fund investment two years ago, allocating more than $300 million to Bridgewater Associates’ Pure Alpha fund. The plan’s new hedge fund hires will get at least $400 million in total.

R.V. Kuhns & Associates, Illinois Teachers’ consultant, will also work with K2 and Grosvenor on the shortlist.

Neither K2, which manages $519 million for the pension, nor Grosvenor, which manages $360 million, is in danger of losing their mandates after helping the system pick single-manager funds. But they may be asked to reallocate to other hedge funds if Illinois Teachers’ picks a hedge fund one already invests in.


In Depth

Q&A: Sancus Capital And The Disruption Of The CLO Market

Oct 5 2017 | 6:28pm ET

Traditional collateralized loan obligation (CLO) funds in the U.S. market can offer...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Finding Success as Alternatives Converge

Oct 9 2017 | 4:00pm ET

Rising interest among institutional investors over the past several years has led...

 

From the current issue of