The Illinois Teachers' Retirement System is keeping its fund of hedge funds management local.
The $40.8 billion pension on Friday handed its entire fund of funds program to Chicago-based Grosvenor Capital Management, terminating its other fund of hedge funds manager, K2 Advisors. TRS had decided in May to eliminate one of the two firms as it reduces its fund of funds investments to focus on direct hedge fund investments.
The pension also picked a firm to assist on that program: Albourne Partners will serve as the general consultant to TRS' absolute return portfolio, currently at $2.15 billion.
For its part, Grosvenor will now manage $998 million for TRS.
TRS said that Grosvenor was a "better current fit" and had "more resources," including a new private-equity business. The pension "decided that having two fund of funds managers and paying the fees for two fund of funds managers was not in the best interest of the portfolio," spokesman Dave Urbanek said.
TRS also approved a $100 million commitment to the Blackstone Group's Real Estate Partners Asia fund.