The State Employees’ Retirement System of Illinois (SERS) provides retirement, disability, and death benefits to state employees in Illinois. The system serves approximately 130,000 active, inactive, and retired members. Investment of the fund’s assets is managed by the Illinois State Board of Investment (ISBI).
Investment Strategy
SERS’s assets are invested by ISBI in a diversified portfolio that includes domestic and international equities, fixed income, real estate, private equity, and other alternatives. The strategic allocation is designed to achieve the fund’s assumed rate of return while managing overall portfolio risk. ISBI conducts periodic asset-liability studies to inform allocation decisions.
The alternatives program includes private equity investments across buyout, growth, and venture capital strategies. Real estate investments span core, value-add, and opportunistic approaches. ISBI has been expanding its alternatives footprint in recent years, recognizing the return premium and diversification benefits that private markets can provide.
ISBI manages the investment programs for multiple Illinois retirement systems, which provides scale advantages in accessing top-tier managers and negotiating fees. The Board and investment staff attend industry conferences and maintain relationships with a broad network of fund managers and consultants.
How to Approach
Fund managers seeking to work with SERS should contact ISBI directly. The Board maintains a structured process for evaluating new managers, including initial screening, detailed due diligence, and Board-level approval. GPs should submit a fund overview, performance history, and details on strategy differentiation. ISBI values operational excellence, transparent reporting, and reasonable fee structures.
Frequently Asked Questions
What is Illinois SERS's alternatives allocation?
Illinois SERS allocates approximately 14% of its portfolio to alternative investments, primarily private equity and real estate. The alternatives program has grown over the past decade as the system has sought to diversify its return sources beyond public markets.
How does Illinois SERS select investment managers?
SERS works with the Illinois State Board of Investment (ISBI), which manages the invested assets for SERS and several other Illinois state retirement systems. ISBI conducts manager searches, evaluates track records, and makes recommendations. External investment consultants also play a role in the due diligence process.
What is the process for GPs to engage with Illinois SERS?
GPs should direct their inquiries to the Illinois State Board of Investment, which is responsible for investment management on behalf of SERS. ISBI evaluates managers based on performance, risk management, fees, and operational quality. The Board meets regularly and reviews new manager recommendations from staff and consultants.
