UNITED STATES - The State Universities Retirement System of Illinois has issued its first Request for Proposal (RFP) for infrastructure managers.
The pension fund recently decided that it wants to invest 1% of its $10.9bn (€8.41bn) in assets in this strategy, so that should give the fund around $100m to invest in infrastructure, according to Dan Allen, chief investment officer for the pension fund.
"It's our feeling that infrastructure will be an excellent diversification play versus the other asset classes that we already invest in," said Allen.
"These are domestic, private, non-US and global equity, fixed income, TIPS, real estate and opportunity fund. The infrastructure allocation comes out of the opportunity fund sector," he added.
Illinois State Universities believes is it likely that the infrastructure component will be invested through commingled funds, largely because this is the structure that most infrastructure managers are using, though no decision has yet been made on whether they will be global or domestic funds.
"This all depends on what kinds of responses we get from our search," said Allen.
Illinois State Universities is hoping to achieve an 8-10% nominal return on its infrastructure investments.
Ennis Knupp + Associates, the pension fund's consultant, will lead the RFP and the deadline for anyone responding to the search is 6 May.
Finalists will then be notified in August and finals presentations, if they are needed, will be held in September.