At their June 20, 2024, meeting, the Chicago Teachers’ Pension Fund (CTPF) Board of Trustees took several investment actions.
The Trustees approved a $10 million investment in JLC Infrastructure Fund II. JLC Infrastructure was founded by Jim Reynolds, Chairman and CEO of Loop Capital, LLC and Earvin Johnson, Chairman and CEO of Magic Johnson Enterprises in October 2015 to manage investments in the infrastructure sector. JLC Infrastructure Fund II is a continuation of Fund I in their infrastructure fund series. Fund II will target public and privately-owned infrastructure assets and businesses in the U.S. and Canada. JLC Fund II is targeting $750 million with plans to make 8 to 10 investments with an average equity investment of $50 to $150 million.
The Trustees approved an investment of $20 million with Mesirow Co-Investment Fund IX. The primary objective of Co-Investment Fund IX is to generate attractive absolute returns by investing in a well-diversified portfolio of individual company investments alongside the industry’s historically top performing managers. Investments are expected to be made in 20 to 30 companies over approximately four to five years with exposure to middle-market buyout (70-75%), growth equity (15-20%) and late-stage venture capital strategies (5-10%).
The Trustees approved a revised International Equity Asset Class Structure. In late 2023, the Board approved a comprehensive International Equity search to simplify the Fund’s structure. The goal was to realign existing EAFE and Emerging Markets mandates into ACWI ex-US strategies to reduce misfit risk. At the May 21, 2024, Investment Committee meeting, the committee considered four different scenarios, and the Board of Trustees approved a structure with 48% weighting to Core and 20% each to Value and Growth with the remainder to international small cap.
Each fiscal year, Investment Staff and Callan deliver a capital pacing study and recommendation to the CTPF Board for capital allocation amounts for the coming fiscal year for the real estate asset class. These allocations assist CTPF in maintaining vintage year diversification and strategic targets for the Fund. The Trustees approved an allocation of up to $60 million to Real Estate Funds as part of the Fiscal Year 2025 pacing plan. The move aims to diversify CTPF’s portfolio by adding exposure to different vintage years and opportunities in both core and non-core investments. The Trustees also approved a search for new Core or Core Plus managers to bring CTPF’s Core/Core Plus allocations closer to the 75%/25% target.
The Trustees approved an Infrastructure pacing amount between $10-$30 million for 2024-2025 Fiscal Year. This will benefit CTPF by adding vintage year diversification and providing additional exposure to opportunities in either core or non-core investment opportunities. CTPF will look for opportunities to re-up with well performing, existing General Partners whose current fund offerings meet the risk, return, and strategic requirements of the Fund’s infrastructure allocation.