Illinois commits $126m to private equity

The retirement system has completed its search for international exposure

The Illinois Municipal Retirement Fund (IMRF) Board of Trustees approved four new private equity commitments according to meeting documents released late last week. The commitments total approximately $126 million.

The system will commit up to £33 million (approximately $56.1 million) to Inflexion Buyout Fund IV which targets middle market buyouts primarily in the United Kingdom. Additionally, the system approved a commitment of up to £22 million (approximately $37.4 million) to Inflexion’s Partnership Capital Fund I, which targets middle market growth equity and structured minority investments primarily in the UK.

As of May, Inflexion was in talks with investors to raise £600 million for its next buyout fund along with a £300 million Partnership Capital fund that will make minority investments in partnership with the main fund, according to Private Equity International’s research and analytics division.

Finally, the system will commit up to €25 million (approximately $33 million) to Doughty Hanson Fund VI, which targets upper middle market buyouts primarily in Western Europe.

The investments reflect a search that the system started in May for at least one UK or European fund focusing on buyouts or growth companies. In June the system committed approximately $35 million to ABRY Partners’ eighth fund which has a target of $1.9 billion. That fund will focus on media, communications, business and information services investments.

IMRF’s portfolio has a 9 percent target allocation to alternative investments (private equity, absolute return, agriculture, and timberland). IMRF’s actual allocation to alternative investments is 5.7 percent (including unfunded commitments), according to meeting documents.

The pension says the new commitments will help it reach its target asset allocation to alternative investments and add international exposure. As of July 31, 2014, the IMRF total portfolio was valued at $34.2 billion.