TRS Approves New Asset Allocation

Dec 13 2006 | 11:49am ET

The $39 billion Teachers' Retirement System of the State of Illinois has established initial allocations for absolute return and real return strategies as part of a new asset allocation plan approved by the TRS board of trustees this month.

The target allocation for absolute return investments is 2.5% of TRS’s total portfolio and 10% of its total fund for real return investments. The board also authorized a search for absolute return adviser/manager.

Under the new plan, target allocations for domestic equities and fixed-income fell from 41% to 30.5% and 23.0% to 15%, respectively. International equities and private equity, on the other hand, got boosts from 15% to 20% and 6% to 8%, respectively. The 14% target allocation for real estate investments will remain unchanged.

The board also made a $50 million to J.C. Flowers II, a buyout fund focused on the financial services sector and $100 million to Providence Equity Partners VI, a buyout fund focused on the media and telecommunications sectors. 

In addition, the board also hired Copper Rock Capital Partners to manage $50 million in small- and mid-cap growth domestic equities as part of TRS’s $500 million emerging managers program. To date, TRS has committed $125 million to the program.

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