Chicago Teachers on the hunt for emerging managers

The $10.2 billion pension plan has issued an RFP for an emerging manager focused on non-core real estate to run a $25 million mandate.

The Public School Teachers’ Pension and Retirement Fund of Chicago (CTPF) is soliciting proposals from emerging managers focused on non-core real estate investments for a mandate of up to $25 million. The pension plan prefers to invest the capital through a commingled fund structure, according to pension documents.
In a request for proposal (RFP) issued last month, CTPF noted that applicants must meet the Illinois State statute requirements for emerging managers. That statute defines an emerging investment manager as a “qualified investment adviser that manages an investment portfolio of at least $10 million but less than $10 billion and is a minority-owned business, female-owned business or business owned by a person with a disability.”
Additionally, the RFP notes that the investment manager or team must have a minimum three-year track record of realized investments within the US on behalf of institutional investors that employed the same strategy as proposed for CTPF. In addition, the proposed $25 million investment must not exceed 20 percent of the investment manager’s cumulative assets under management.
During the selection process, all respondents to the RFP will be evaluated on four criteria: people (stability of the organization, ownership structure and experience); process (a “clearly defined, reasonable and repeatable” investment strategy); performance (documented ability to meet long-term performance benchmarks and consistency of performance relative to peers); and pricing (fee schedule and associated costs).  The RFP is scheduled to close on July 8.
As of February 28, the $10.2 billion pension plan had allocated $804 million to private real estate, representing 7.9 percent of its overall portfolio. In March, CTPF issued an RFP for industrial-focused real estate managers to run a $50 million mandate. Late last month, the pension plan announced it had selected two managers for the mandate, committing $40 million to Clarion Partners’ Lion Industrial Trust and $10 million to Industry Capital’s IC Berkeley Partners III.