ISBI lays out asset allocation changes

The public pension has announced future plans for its private equity exposure.

  • Name: Illinois State Board of Investment
  • HQ: Chicago, US
  • AUM: $23.48 billion
  • Allocations to alternatives: 29.5%

As first announced in affiliate title Buyouts, Illinois State Board of Investment will increase its private equity target allocation to 10 percent in 2023, according to materials from the public pension’s September 30th board meeting.

Highlights from Illinois State Board of Investment’s September 30th retirement board meeting:

  • The ISBI board has put in motion plans to increase their private equity target allocation from 9 percent to 10 percent in 2023. These changes would be facilitated by decreases from the corresponding public market equivalents.
  • This is consistent with the Fund’s long-term plan to increase private equity exposure in their investment portfolio. The asset class is expected to produce higher long-term returns than their public market counterparts and can generate significantly more alpha, with less volatility.
  • The Board also intends to update the asset class range for private equity. Currently, ISBI maintains a +/- 5 percent range for private equity. The change would place them at a <15 percent benchmark for the asset class.
  • Illinois also announced $450 million in private equity commitments across 14 vehicles, as of August 2022.

The private equity commitments made in 2022 are as follows:

The pension has a 9.2 percent allocation to private equity, which comprises $2.2 billion in capital.

As illustrated below, ISBI’s recent private equity commitments have been predominantly focused on North American buyout vehicles, which invest under a variety of sectors.

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