The Teachers’ Retirement System of the State of Illinois has terminated Callen Associates as its real estate consultant, replacing the company with Courtland Partners.

The pension fund said trustees “very much valued” the relationship with Callen but felt Courtland presented a vision for the future that better matched the needs of the plan’s real estate portfolio.

The decision, following a new consultant search, saw Courtland and Callan as the two finalists.

Courtland was hired under a new five-year contract by Illinois Teachers, which has an existing real estate portfolio valued at $5.7bn (€4.8bn).

The institutional investor places capital through funds, separate accounts and joint ventures and can invest in US and international real estate.

The pension fund recently approved a $30m allocation to Integrated Capital’s Hospitality Fund II, lower than the normal range of $50m-200m it deploys.

The investment was made as part of its emerging manager programme for all asset classes.

Illinois Teachers said the investment complemented its existing hospitality assets and would help expand the portfolio.

Integrated Capital is targeting a $200m capital raise for the fund around 12 months from now.

The Teacher Retirement System of Texas has also backed the value-add fund, which is buying hotels in the US and Canada.

Investments will include full-service, economy and resort properties.

Hospitality Fund II will be looking to buy existing properties it can re-position, targeting returns in the mid-teens.

Leverage will be in the range of 55% to 60%.  

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