The Illinois Police Officers’ Pension Investment Fund has announced it is soliciting a request for proposals for active managers of its bank loan strategy as it seeks to increase investments in the asset class. The IPOPIF, created in 2019, is a public pension investment fund managing the assets of 357 downstate and suburban Illinois police pension funds.
The IPOPIF currently has $9.4 billion in assets under passive management, and all public strategies are passively managed, with no allocation to bank loans. The pension fund plans to eventually allocate 3%, or about $300 million, to the bank loans asset class via an active manager, the funding for which will come from passive exposure to high-yield credit investments. The fund currently allocates 10% to high-yield debt but has a long-term strategic target of 3%, or approximately $300 million.
The IPOPIF seeks investments in separately managed accounts, commingled funds, mutual funds, ETFs and other similar vehicles. The fund will accept limited exposure to CLO and high-yield debt but will not accept hybrid strategies such as a 50/50 bank loan and high-yield portfolio or any combination of credit securities, according to the RFP.
The IPOPIF RFP states that the number of managers and the size of allocations will be determined as part of the search process. Individual allocations are expected to be at least $150 million. The pension fund also wants to include emerging managers (managers with a portfolio of at least $10 million but less than $10 billion), women, veteran, minority and disadvantaged managers in the search process. Candidate firms will be screened by several criteria, including:
- Firm background, experience and reputation;
- Investment philosophy;
- Performance, consistency of performance and risk factors relative to benchmarks;
- Size of candidate firms’ fees;
- Portfolio management and client services;
- Corporate, environmental, social capital, human capital, business models and innovation factors; and
- How candidate firms approach, manage and reduce cybersecurity risk.
The RFP was posted on September 18. More information is available on the pension fund’s web site.
Tags: Illinois, Illinois Police Officers’ Pension Investment Fund, IPOPIF