SPRINGFIELD, IL – The Teachers’ Retirement System Board of Trustees confirmed its long-standing commitment to increase diversity, equity and inclusion within its investment program by enlarging the size of the System’s Emerging Manager Program (EMP) from $750 million to $1 billion.
The increase in the size of the EMP is just one part of a multi-pronged “reimagining" of the 15-year-old program and the System’s efforts to increase diversity. Currently the EMP is composed of 17 relationships with a total TRS commitment of $724 million.
Over the last several years the EMP has led the system’s efforts to increase participation in the portfolio by minority and women-owned business enterprises. Current EMP participants and graduates of the program are now managing more than $3.5 billion in TRS assets.
In the last five years, the total percentage of assets in the TRS portfolio managed by MWBE firms has increased by 17.9 percent; sparking the need to increase the size of the EMP. Overall, TRS commitments to MWBE firms, including EMP allocations, total $12.6 billion, or 23.4 percent of the System’s total $53.5 billion portfolio.
“The objective of the EMP always has been to invest in promising, developing asset managers and to create meaningful, long-term relationships. Further, it allows TRS to focus on identifying and sourcing underrepresented minority and female-owned managers,” said Acting TRS Executive Director Stan Rupnik. “Moving forward, the program intends to adopt a broader definition of diversity and to find diverse managers that meet the needs of our portfolio.”
Along with increasing the size of the EMP, the reimagining of the system’s diversity efforts will include an increase in diversity hiring across asset classes; updating internal diversity selection metrics; better measurement and monitoring of diversity and inclusion practices within money management firms; and expanding the reach of the annual TRS Opportunity Forum.
The Trustees also approved the issuance of a “Request for Proposals” seeking consulting services to help TRS develop a standardized measurement and evaluation tool for diversity, equity and inclusion opportunities.
During the Board of Trustees’ regularly scheduled December meeting, the trustees gave final approval to a $5.69 billion state government contribution to the System for fiscal year 2022, a 10.7 percent increase over the current fiscal year’s government contribution of $5.14 billion.
Staff also reported the following activity within the TRS investment portfolio:
- Within the $15.5 billion Global Income Portfolio:
- The commitment of €50 million to Blantyre Capital Ltd., of London, United Kingdom. This is a new investment relationship for TRS with a minority and women-owned business enterprise under the Emerging Manager Program.
- Within the System’s $6.6 billion Private Equity Portfolio:
- The commitment of up to $75 million to Bertram Capital Management, of Foster City, California. This is a new investment relationship for TRS.
- Within the System’s $8.2 billion Real Assets Portfolio:
- The commitment of up to $300 million to Starwood Capital Group, of Miami, Florida. Starwood currently administers $650 million in TRS assets.
- Within the System’s $5.5 billion Diversifying Strategies Portfolio:
- An additional commitment of $100 million to Aspect Capital, of London, United Kingdom. Aspect currently administers $253 million in TRS assets.
- The full redemption of $225 million from Informed Portfolio Management, of Stockholm, Sweden.
- The full redemption of $175 million from The Man Group, of London, United Kingdom.
About Teachers’ Retirement System
The Teachers’ Retirement System of the State of Illinois is the 25th largest public pension system in the United States, and provides retirement, disability and survivor benefits to teachers, administrators and other public school personnel employed outside of Chicago. The System serves 427,321 members and had assets of $53.5 billion as of September 30, 2020.