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Testimony heard on diversity goals for public pension funds

11/1/2017, noon | Updated on 11/1/2017, noon
State Senator Kwame Raoul, (District 13th) and the Special Committee on Pension Investments recently reviewed Illinois Municipal Retirement Fund (IMRF) ...
State Senator Kwame Raoul, (District 13th) and the Special Committee on Pension Investments recently reviewed Illinois Municipal Retirement Fund’s (IMRF) eorts in meeting diversity goals among emerging minority investment firms. Photo Credit: Christopher Shuttlesworth

Testimony heard on diversity goals for public pension funds

By Christopher Shuttlesworth

State Senator Kwame Raoul, (District 13th) and the Special Committee on Pension Investments recently reviewed Illinois Municipal Retirement Fund (IMRF) progress to increase diversity among emerging minority investment firms.

The Illinois Senate has held these annual hearings since 2004, to discuss different ways the state can continue to break barriers for emerging minority investment managers, according to a Sen. Raoul press release.

During the two-day hearing, Louis W. Kosiba, executive director for Illinois Municipal Retirement Fund (IMRF), said for firms to be successful in the investment community, they must have access to decision-makers, specifically IMRF investment team.

“On our investment team, we have seven men and five women, three Hispanics, one African American, one Asian and seven non-minorities,” Kosiba said. “75 percent of our company includes men, 25 percent women, 67 percent is non-minority and 33 percent is African American.”

Kosiba continued to explain that 50 out of 230 IMRF meetings were conducted with minority-owned firms in 2017 and 57 meetings were conducted with minority firms in 2016.

“As of Sept. 30, 2016, IMRF’s market value was $35.82 billion, according to IMRF’s 2016 Annual Diversity Report. “Since 2002, IMRF has grown from utilizing three to 56 Minority-owned investment managers owned by minorities, females or individuals with disabilities and increased from $1.2 billion to ($7.2 billion), which represents Illinois’ required 20 percent of total minority investment.

During day two of the hearing, Kosiba said 40 percent of all new capital was directed to minority managers and 69 percent of all private equity was given to minority managers in 2017.

“I think it’s important to understand the culture that we are developing at IMRF,” Kosiba said. “It’s important to recognize that we are engaging with [different] emerging managers to provide leadership, mentorship and development help within the investment community.”

Senator Iris Y. Martinez, who sits on The Special Committee on Pension Investments, acknowledged that IMRF has made progress in accomplishing more diversity within the investment community but she said there is still more work to be made.

“The fact that we quote 20 percent as the magic number is not [okay] and we see you’ve gone beyond that,” Martinez said.

“But I want to encourage you to give the local minorities opportunities even if they don’t have what it takes to be looked at because we have to grow local firms and make sure Illinois firms are at the forefront of growth.”

Illinois Senator James F. Clayborne, Jr., said the board wants IMRF to continue to broaden its horizon and understand that there is a talent out in today’s world that may not have been in existence 50 years ago, but now deserves the opportunity to participate in the game and not on the bench.

According to IMRF’s 2016 Annual Diversity Report, funding and ownership changes occurred between Oct. 1, 2015 to Sept. 30, 2016, and $100 million was committed to Artemis Real Estate Partners, $20 million was committed to Mayfield, $175 million was committed to Vista Equity, $50 million was allocated to Ativo, $275 million was allocated to Garcia Hamilton, $30 million was committed to Long Wharf and $200 million was funded to Progress Fixed Income Manager of Managers.

The Special Committee on Pension Investments included Chair and State Senator Kwame Raoul, Co-Chairperson Sue Rezin, Member James F. Clayborne, Jr., Member Senator Iris Y. Martinez, Toi W. Hutchinson, Member Tim Bivins, Member Dan McConchie and Member Karen McConnaughay.

For more information, visit https://www.imrf.org/en/investments/about-investments/reports.