Ill. Teachers Pour $725M Into Alternative Investments

Nov 1 2011 | 9:09am ET

Illinois' teachers are boosting their hedge fund investments, both now and for the future.

The $37.5 billion Illinois Teachers' Retirement System approved follow-on allocations totaling $450 million to three existing hedge fund managers and a $15 million investment in a commodity hedge fund launched by a Tudor Investment Corp. veteran. The pension's board also approved searches for as many as six more hedge funds and transition managers, with two to three new hires expected in each of the next two years.

The biggest beneficiaries of TRS' largesse are BlueMountain Capital Management, Claren Road Asset Management and Carlson Capital, each of which received an extra $150 million from the public pension. In addition, as part of its emerging managers program, TRS invested $15 million with Flintlock Commodity Opportunity Partners, founded two years ago by former Tudor commodities research chief Steve Matthews.

TRS also poured $260 million into its private equity portfolio, handing a $200 million mandate to Leonard Green & Partners and $30 million each to Longitude Capital Management and TrustBridge Partners.

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