Illinois Municipal inches toward PE target with Vistria

The additional allocation by the Illinois Municipal Retirement Fund (IMRF) to Vistria Fund edges the pension fund closer to its 9 percent target for private equity allocations, an IMRF spokesperson said.

“The $10 million allocation to Vistria will diversify IMRF’s direct private equity portfolio and help IMRF strategically achieve the 9 percent target,” the spokesperson said.

Vistria, an Illinois-based PE firm with a minority, female and persons with disability ownership, has so far raised $331 million for its debut fund, according to PEI’s Research & Analytics.

The IMRF board of trustees upped its commitment to the Vistria Fund at the end of August by $10 million from an initial commitment of $5 million in March 2014.

With the unfunded commitments, including the latest one to Vistria, the pension fund’s allocation to private equity rises to 6.2 percent, or $2.2 billion, of the fund’s total portfolio of $35.6 billion. Private equity accounted for 4.3 percent, or $1.5 billion, of the fund’s portfolio on 30 June.

The IMRF investment policy, amended on 23 April, states that the target range for PE allocation is between 5 and 13 percent. The maximum commitment the IMRF can make to any direct alternative fund manager is 40 percent of the total alternatives portfolio and unfunded commitments.

According to the monthly performance report for the period ended 30 June, private equity generated returns of 0.01 percent, below the target return of 0.72 percent. The IMRF targets 7.5 percent annual returns for PE for five-year, 10-year and 15-year periods. Its PE portfolio posted 11.33 percent and 10.7 percent for the five- and 10-year periods, respectively, as of 30 June.