By Muskan Arora
The $12.7bn
Chicago Teachers’ Pension Fund set its private equity pacing to $180m for the
year, to reduce exposure to the sleeve.
While the
pacing is up from 2023’s figure of $50m, the pacing is a part of the long-term
plan to reduce investments to its 5% target allocation.
The system
currently allocates 8.9% to its private equity sleeve, which exceeds the
upper-limit target of 7%.
The pension
plan estimates that it would have significantly limit its pacing to an average
of $75m over the next five years, and expects to reach its PE target by 2030,
as per the recent meeting recording.
This year’s
pacing includes a $150m re-investment to Adam Street Separate Account, which focuses
on large-cap buyouts. The manager will receive re-investments on a three-year
interval basis over the next nine years.
Additionally,
the pension plan aims to make investments towards minority, women and
disadvantaged business enterprises (MWDBE) emerging managers, with a
re-investment in one incumbent manager from 2024.
Fund of
funds total to 50% of the system’s private equity sleeve, while the 45% is
comprised of MWDBE direct investments.
Triggered
by denominator effect, the fund has been making efforts to reduce its exposure
to private equity since 2021.
Multiple pension
plans including Oregon State Treasury, have also been impacted by the
denominator effecting due to over-exposure to private equity.
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