UNITED STATES - State Universities Retirement System of Illinois has approved new manager searches for real estate and infrastructure, in a bid to achieve higher returns than available in equities and bonds.
The real estate searches, assisted by its consultant, Ennis Krupp + Associates, will be given first priority and will this time be focused on value-added and opportunistic strategies, either domestically or with an international profile.
Illinois State Universities has an established core portfolio in real estate which was accomplished by investing 2% of the $14.6bn pension fund's total portfolio in commingled funds and 4% in public REITs.
The actual amount allocated for the new searches has not been determined at this point but the activity is part of the pension fund's decision earlier this year to increase the targeted allocation for real estate from 6% to 10%.
There is also a possibility that the pension fund will invest further capital in core strategy assets in 2010.
By June this year, Illinois State Universities had invested $850m in real estate, amounting to 5.8% of total plan assets but the pension fund has also decided to invest 1% of total plan assets in infrastructure as the investor thinks the asset class will produce solid investment returns over a long period.
Its plan here is to invest in commingled funds but any search for infrastructure is unlikely to begin before spring 2009.