Tuesday, 5 May 2015
Last updated 2 hours ago
Jun 25 2012 | 1:31pm ET
Illinois' prepaid college tuition savings plan is scaling back its effort to catch up from a massive shortfall—an effort that relied heavily on hedge funds.
The Illinois Student Assistance Commission is expected to vote today to slash the College Illinois program's alternative investments exposure by almost half. The move isn't unexpected: ISAC ousted its chief investment officer, Andrew Davis, a year ago after a Crain's Chicago Business report revealed that the College program's assets had been shifted heavily into hedge funds, private equity and real-estate investments.
Indeed, trying to make up for a 30% funding shortfall, ISAC had poured 47% of the $1 billion College fund into alternatives. Under new CIO Kent Custer's plan, that total will fall to 27%.
Among the casualties of the new plan, and of Davis' exit, is a small Chicago hedge fund run by Davis' friend, Joseph Reynoso. ISAC plans to yank half of its $20 million investment in Reynoso's fund. The $20 million represents half of Reynoso's total assets.
"It's a smaller fund," Custer said of Reynoso's fund. "You don't want to represent [most of] the assets of any fund."
Callan Associates assisted in the ISAC plan with an asset-allocation study. Much of the hedge fund cut will benefit the College fund's stock portfolio, which will rise from 23% to 48%.
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…