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Investments
Overview
The Investment Department’s mission is to optimize the risk-adjusted return of the portfolio using prudent principles of investment management and portfolio diversification. The Investment Department works with independent, professional investment managers and investment consultants to achieve this goal.
The primary return objectives of the Fund are to:
- preserve the safety of principal;
- perform above the Fund's policy benchmark consistent with prudent levels of risk; and
- create a stream of investment returns to ensure the systematic and adequate funding of actuarially determined benefits through contributions and professional management of Fund assets.
To achieve these objectives, the assets of the Fund have been allocated to meet its actuarial assumed rate of return.
Cook County Fund
Table 1: Cook County Fund - Total Assets
(as of June 30, 2010) |
| Year |
Quarter End |
Net Assets |
| 2010 |
June |
$6,429,386,825 |
| Table 2: Cook County Fund - Asset Allocation |
| |
Actual (as of June 30, 2010) |
| Domestic Equity |
43.7% |
| International Equity |
11.0% |
| Fixed Income |
42.0% |
| Alternatives |
2.7% |
| Cash |
0.6% |
Table 3: Cook County Fund - Performance Returns
(as of September 30, 2009) |
|
Custom Benchmark = 30% BarCap Aggregate, 25% S&P500, 12% MSCI ACWI ex US, 7% Russell MidCap Growth, 7% Russell 2000 Value, 6% Russell 1000 Value, 6% Russell 1000 Growth, 5% BarCap Int. Gov./Cred. and 2% NCREIF.
Note: All results as shown are unaudited.
Forest Preserve District Fund
Table 1: Forest Preserve District Fund - Total Assets
(as of June 30, 2010) |
| Year |
Quarter End |
Net Assets |
| 2010 |
June |
$153,713,567 |
| Table 2: Forest Preserve District Fund - Asset Allocation |
| |
Actual (as of June 30, 2010) |
| Domestic Equity |
44.7% |
| International Equity |
13.7% |
| Fixed Income |
39.6% |
| Alternatives |
1.3% |
| Cash |
0.7% |
Table 3: Forest Preserve District Fund - Performance Returns
(as of September 30, 2009) |
|
Custom Benchmark = 30% BarCap Aggregate, 25% S&P500, 15% MSCI ACWI ex US, 7.5% Russell 1000 Value, 7.5% Russell 1000 Growth, 5% Russell 2000 Value, and 10% BarCap Int. Gov./Credit.
Note: All results as shown are unaudited.
Key Initiatives and Policies
Under the guidance and direction of the Board and governed by the "prudent man rule", it is the mission of the Fund and the Investment Staff to optimize the total return of the Fund's investment portfolio through a policy of diversified investments using parameters of prudent risk management as measured on the total portfolio, acting at all times in the exclusive interest of the participants and beneficiaries of the Fund.
1. Statement of Investment Policy
The purpose of the investment policy is to outline a philosophy which will guide the investment management of the assets toward the desired results and shall be implemented, subject to Fund standards, in a manner consistent with the stated mission of the Fund, while ensuring transparency and compliance with all applicable laws and regulations.
In addition, the policy is set forth by the Board in order to offer specific guidance to and define limitations for all Investment Managers regarding the investment of Fund assets and to promote transparency for the procurement and delivery of investment services. The policy is intended to serve as a reference tool, an operating code, and a communication bridge between the Board, the Investment Staff and investment professionals.
2. Emerging Investment Manager Program
The Fund through its investment management activities seeks to achieve superior risk adjusted returns to meet the performance and funding requirements of its retirees and recognizes that exposure to Emerging Investment Managers can be a beneficial component of a well diversified portfolio. Consistent with the Fund's long-standing commitment to the utilization of Emerging Investment Managers and in support of public policy as declared in the Illinois Pension Code [40 ILCS 5/1-109.1], the Board seeks to be inclusive of Emerging Investment Managers throughout its investment activities. The Board has adopted policy guidelines as a framework in establishing the operational guidelines and procedures of the Emerging Investment Manager Program as well as goals to increase the utilization of Emerging Investment Managers.
Program Objectives:
- To increase the utilization of Emerging Investment Managers;
- To proactively identify best-in-class Emerging Investment Managers who demonstrate the capacity to become long-term viable partners of the Fund;
- To maintain guidelines and funding strategies that encourage the inclusion and support the development of Emerging Investment Managers; and
- To employ prudent selection processes and practices consistent with the high fiduciary standards for all investment management decisions.
In fulfillment of the Emerging Investment Manager Program and pursuant to PA96-0006 of the Illinois Pension Code, the Board has established target range goals for the utilization of Emerging Investment Managers for the Fund's asset classes as well as for the utilization of Emerging Investment Managers across the Fund. These goals are part of the Fund's long-term strategy consistent with the asset allocation and rebalancing objectives and will be reviewed annually.
| Emerging Investment Manager - Utilization Goals1 |
| As a % of Asset Class |
| Domestic Equity |
15%-17.5% |
| International Equity |
5%-10% |
| Fixed Income |
15%-17.5% |
| Alternatives |
5%-10% |
| Emerging Investment Manager - Utilization Goals1 |
| As a % of Fund |
| Minority |
10%-15% |
| Women |
2.5%-5% |
| Disabled-Owned |
0%-1% |
3. M/W/DBE Broker/Dealers
The Board encourages the use of broker/dealer firms that are Minority, Woman, or Disabled-Owned Businesses2 and has adopted a policy which sets forth goals for increasing the utilization. The Fund encourages its Investment Managers to assist the Fund in implementing this policy providing an opportunity for such broker/dealers who are capable of providing best price and execution.
| M/W/DBE Broker/Dealers |
| Minimum Annual Goals |
| Domestic Equity |
33 1/3% of commissions |
| International Equity |
10% of commissions |
| Fixed Income |
10% of volume |
| Transition Mgmt. |
40% of commissions |
The Fund's Investment Managers shall give consideration to certified Minority, Woman, or Disabled-Owned Businesses when executing trades for the Fund with preference to those entities located in the State of Illinois, subject to each Investment Manager, as fiduciary to the Fund, being responsible for implementing trading policies that result in the best price and execution of any broker/dealer selected.
4. Investment Manager Selection and Procurement
The strategy of the Board is to achieve superior long-term rates of return through the use of a diversified investment portfolio. The Board engages various investment managers to implement this strategy. The Fund has adopted a proposal and selection process that promotes competitive standards, objective evaluation and transparency for the procurement of investment management services.
For further discussion regarding procurement procedures, please refer to Procurement Opportunities.
1 - Utilization goals approved at November 6, 2009 Board Meeting.
2 - As defined in the Business Enterprise for Minorities, Women and Persons with Disabilities Act, 30 ILCS 575/0.01, et seq.