Illinois Pension Boosts Alternatives with $200M Commitment
The Illinois Municipal Retirement Fund (IMRF) Board of Trustees greenlit $200 million in new commitments to its alternative assets program during its monthly meeting, with $100 million earmarked for real estate and $50 million each to its private credit and private equity strategies.
Virtus Real Estate Capital IV, a value-add real estate fund, is managed by Virtus Real Estate Capital out of Austin, Texas. Introduced in 2023, it targets investments in healthcare, education, storage, middle-income workforce housing, and emerging sector
The second fund chosen is the Kayne Attainable Housing Fund, managed by Kayne Anderson Real Estate. Launched in 2021, this strategy aims to capitalize on the U.S. housing market’s supply-and-demand gap, targeting multifamily development to generate returns from the persistent shortage of affordable residential properties.
The IMRF currently holds $5.3 billion in private real assets, falling just shy of its 10.5% target allocation within its $56.4 billion portfolio. In 2024, this asset class posted a -2.3% return, reflecting a challenging year, though the new $100 million commitments signal a push to bolster this underweight segment.
The retirement fund selected credit and private equity strategies to enhance its $6.6 billion alternative investment program. Among these, Pemberton Asset Management was tapped to manage up to $50 million in the Pemberton Strategic Credit Fund IV. This European direct lending fund targets performing credit, steering clear of stressed or distressed debt and loan-to-own investments
Trustees allocated a second $50 million to Hg Saturn 4, a fund also under review by the Connecticut Retirement Plans and Trust Funds and already backed by the New Jersey Division of Investment. Classified as a high-conviction, sector-focused European buyout fund, Hg Saturn 4 is Hg’s upper-middle market strategy. It aims to make 8 to 10 platform investments, each with equity investments exceeding $1.25 billion. The fund, targeting a total of $12 billion in assets, projects an internal rate of return (IRR) of 20% to 25%
The board also evaluated its investment policy for 2025, approving an increase in its target allocation for investments with Minority and/or Women-Owned Business Enterprise (MWBE) firms to 23% from 22%. As of now, minority-owned investment management firms oversee $14.48 billion of IMRF’s assets.