The Illinois State Board of Investment and Courtland Partners have ended their real estate investment consulting relationship, PERE has learned.
The Cleveland, Ohio-based real estate and infrastructure consulting services firm resigned from the ISBI account effective May 31, a spokesman said in an email to PERE. He did not provide further details regarding the reason for the resignation or a replacement for Courtland, adding: “We will be able to share more information in the near future after our next board meeting on June 15.”
ISBI hired Courtland as its real estate consultant in June 2013. The pension fund manager previously had used Townsend Group as its dedicated consultant in the asset class, but terminated the relationship in 2011 and had its general investment consultant, Marquette Associates, assume Townsend’s real estate consulting responsibilities.
In 2015, ISBI launched a real estate consultant search to compare Courtland with its competitors in the marketplace. At the time, executive director William Atwood pointed to Courtland’s size as “a fairly boutique firm” and wanted to assess what ISBI’s options were in terms of larger alternatives. The outcome of the search was that Courtland was retained.
Last year, Courtland helped advise ISBI on restructuring its property portfolio by lowering its core exposure from 80 percent to 65 percent, according to the pension manager’s 2016 annual report. ISBI also is seeking to gradually eliminate its separate account exposure and further diversify its real estate portfolio with greater exposure to non-US, opportunistic and core-plus investments, the report said.
Courtland parting ways with ISBI follows the firm’s loss of another real estate client, Hawaii Employees’ Retirement System, which selected Chicago-based Aon Hewitt as its new real estate consultant after a three-month search. Courtland previously had served as the pension plan’s real estate consultant for nine years.
Vijoy Chattergy, ERS’s chief investment officer, told PERE last month that it conducts a new consultant search every five years and that most recent search was unrelated to the death of Michael Humphrey, Courtland’s co-founder, in December.
ISBI manages the pension assets of the General Assembly Retirement System, the Judges’ Retirement System of Illinois and the State Employees’ Retirement System of Illinois. The pension manager had $16.88 billion in total assets, of which 9.5 percent was in real estate, as of April 30. ISBI’s current allocation target in the asset class is 10 percent.