NEWS

Supply-demand housing imbalance opens opps for IMRF within RE

By Muskan Arora

The $54.9B  Illinois Municipal Retirement Fund has recently allocated up to $200M to its real estate portfolio, along with expanding its appetite for minority and women owner firms.

“What drove us to do that really was the supply-demand imbalance in residential real estate,” said the CIO Angela Miller-May. “That's driving the opportunity in housing: the supply has just not kept up with the demand, whether it's a new-build supply or existing supply.”

Within real assets, the pension plan committed up to $50M to Virtus Real Estate Capital IV, a fund launched in February 2023.

Virtus is a value-add strategy fund which primarily invests in healthcare, industrial student housing and multifamily/residential sectors. The fund focuses on investments in North America.

Another $50M was committed to Kayne Attainable Housing Fund, a newly launched fund.


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The fund focuses on investments within the multifamily and residential sector.

The higher inflation that has caused the cost of materials and labor to increase — that's driving the cost of new builds, which is why the supply is not as great as it used to be,” added the CIO.

Lastly, in February, the fund approved $25 million to Mesirow Financial Real Estate Value Fund V, $50 million to Pretium Affordable Single-Family Rental Fund and $25 million to S2 Real Estate Fund II.

The pension plan allocates 8.66% or $4.76B to its real estate bucket.

Within alternative investments, IMRF committed up to $50M to Pemberton Strategic Credit Fund IV, a direct lending fund that focuses on performing credit rather than stressed/distressed debt and loan-to-own debt investments.

Another $50M were invested to Hg Saturn 4, a buyout fund that will focus on European headquartered and transatlantic businesses.

The board approved a hike in target of minority and women led funds from 22% to 23%.

Further, the Illinois legislature has set a target of at least 20% of investing in minority and women owned firms.

With that top down or top up support that we're seeing, my team and I have a shared responsibility to continue to encourage and support diversity, equity and inclusion as a strategy to increase our financial outcomes,” said Miller-May.

Besides investing directly, IMRF relies on a manager of managers or fund of funds to invest in Minority-owned investment managers in International Equity, Fixed Income, Real Assets, and Alternatives asset classes.