Illinois Police Pension Seeks Active Manager for Small, Mid-Cap Stocks

The $9.4 billion Illinois Police Officers’ Pension Investment Fund is currently soliciting proposals to hire an active investment manager of global or international small- or small/mid-capitalization stocks.

The IPOPIF, a consolidated asset pool of 357 separate police pension funds, has a 5% asset allocation to international small-cap stocks, currently invested in a passive commingled trust worth $450 million as of June 30. The IPOPIF wants to increase investment returns for the allocation through active investment management.

Under the scope of services listed in the request for proposal, the IPOPIF is looking for qualified firms to manage a portion of the plan’s international small-cap equity assets, which can include global or international small- or small/mid-cap stocks.

Candidates are expected to be qualified investment advisers and, if selected, will serve as a fiduciary to the IPOPIF and have independent discretionary authority regarding how the portfolio is managed, subject to the fund’s investment policy. The IPOPIF can use commingled funds, mutual funds, exchange-traded funds or similar commingled vehicles.

According to the pension fund, candidate responses will be evaluated first by its CIO and an investment consultant, who will determine, based on certain evaluation factors, the top investment managers and will also disclose the non-finalists. The final decision on who to hire will be made by the IPOPIF’s board of trustees. The evaluation factors include, among others:

The firm’s background, experience and reputation, including its experience managing institutional portfolios;
Investment philosophy and process;
Performance, including long-term performance, risk factors and consistency of performance relative to benchmarks and peers;
Reasonableness of fees, including availability of ‘most-favored nation’ fee clauses; and
Portfolio management and client services, including client servicing, accounting and reporting.

The number of managers and the size of allocations will be determined as part of the search process, but individual allocations are expected to be at least $100 million. IPOPIF also is looking to include in the search emerging managers; minority, women and disadvantaged business enterprise managers; and veteran-owned managers.