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.
Please Click Here to Register Now!
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.