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Illinois Teachers’ outlines FY2021 real estate plan

The US public pension has indicated how it intends to meet its real estate portfolio pacing plan.

Institution: Teachers’ Retirement System of the State of Illinois
Headquarters: Springfield, United States
AUM: $52.92 billion
Allocation to private real estate: 13.8%

Teachers’ Retirement System of the State of Illinois set out an FY2021 tactical real estate portfolio plan at its August 2020 investment committee meeting, a contact at the pension informed PERE.

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Highlights from Illinois Teachers’ August 2020 investment committee meeting:

  • Set target allocation to real estate as 16 percent of full investment portfolio. Target allocations to real estate sub-sectors are as follows:
    • Core real estate: 8 percent of full investment portfolio
    • Value-add real estate: 3 percent
    • Opportunistic real estate: 5 percent
  • Outlined $440 million in capital deployment for FY2021 to commingled opportunistic real estate funds to drive allocation towards the asset class’s long-term 16 percent target.
  • Committed to continued development of the emerging manager platform.
  • Considered possibility of on-boarding additional real estate debt strategies to emphasize downside protection.
  • Discussed intention to increase co-investment allocation.
  • Continued plans to build out of property type diversification in the real estate portfolio with aims to increase exposure to niche property types.

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Illinois Teachers’ current allocation to real estate stands at 13.8 percent of assets under management – around $7.3 billion. The pension’s target of 16 percent of total assets equates to around $8.5 billion. Since the turn of the year, the pension has made just one real estate commitment: $150 million to Oak Street Real Estate Capital Fund V.

Stan Rupnik is Illinois Teachers’ chief investment officer and acting executive director. Rupnik has been with the pension since April 2003. Dakin Sanert is an investment officer within the real estate team and has worked at the pension since October 2008. Prior to this, Sanert worked in the private sector with AXA.

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