HEDGE FUND INVESTMENTS IN ILLINOIS Across the state of Illionis, hedge funds help build retirement security, expand access to higher education, and improve the quality of life in local communities.
Institutional investors – like public and corporate pensions, university endowments, and philanthropic foundations – use hedge funds to diversify their investment portfolios and manage risk. Ultimately, hedge funds are an important tool used by institutional investors to help meet their financial obligations.
Hedge funds are no longer exclusively used by individual wealthy investors. Globally, 65% of hedge fund assets come from institutional investors.1
Hedge Funds Help Build Retirement Security
Illinois Teachers’ Retirement System The fund provides retirement and other benefits to teachers in the state, serving a combined membership of 267,301 workers, retirees and survivors. 2 As of June 30, 2012, the System invests $1.98 billion, more than 5%, of its $36.3 billion in assets, in hedge funds. 3
State Retirement System of Illinois The Illinois State Board of Investment (ISBI) manages the pension assets of the General Assembly Retirement System, the Judges' Retirement System of Illinois and the State Employees' Retirement System of Illinois.4 In 2012 the State Retirement System had 125,782 total members.5 As of June 30, 2012, ISBI invested more than $1.075 billion, about 9%, of its $11.5 billion portfolio in hedge funds.6
Illinois Municipal Retirement Fund The fund is set up for all municipal workers in Illinois, except those in Chicago and Cook County.7 As of June 30, 2011, there were 175,844 active and 86,241 retired participants.8 According to its most recent annual report in 2011, $360 million of the $25 billion fund was invested in alternative investments, which includes hedge funds.9
Chicago Teachers’ Pension Fund The Fund is managed for certain teachers and employees of the Chicago Public School System.10 As of June 30, 2011, there were 30, 133 active and 25, 199 retired participants.11 According to its most recent report in 2011, the Fund invested nearly $178 million of its $10.5 billion total assets in hedge funds.12
Municipal Employees’ Annuity and Benefit Fund of Chicago MEABF was established to provide pensions for municipal workers in the City of Chicago.13 As of June 30, 2011, there were 31,976 active and 18,813 retired participants.14 In 2011, The Fund invested approximately $483.1 million, or 10%, of its $4.9 billion assets in hedged equity.15
Cook County Pension Fund The fund provides retirement and disability benefits to municipal workers of Cook County and the Forest Preserve District.16 As of June 30, 2011, there were 22,037 active and 13,023 retired participants.17 In 2011, the fund invested $272 million of its $7.3 billion total investments in alternative investments.18
Policemen’s Annuity and Benefit Fund of Chicago and Firemen’s Annuity & Benefit Fund The Policemen’s Annuity and Benefit Fund of Chicago provides retirement and health benefits to retired members of the Chicago police force.19 The Firemen’s Annuity & Benefit Fund provides the same to retired Chicago firemen.20 As of June 30, 2011, there were 12,236 active and 12,663 retired participants in the Policemen’s Annuity and Benefit Fund of Chicago.21 According to the 2011 Financial Report, $79.2 million of the nearly $3.8 billion fund is invested in hedge funds.22
Laborers’ and Retirement Board Employees’ Annuity & Benefit Fund of Chicago The Fund provides retirement benefits to public labor service employees, certain Board of Education employees, and employees of the Policemen’s and Firemen’s Annuity and Benefit Fund.23 As of June 30, 2011, there were 4,269 active and inactive employees.24 As of June 2011, $54.3 million of the Fund’s $1.3 billion total investment was allocated to hedge funds.25
JP Morgan Chase & Co. Chase employs more than 16,000 workers in Illinois.26 According to its 2011 financial report, JPMC allocated $1.97 billion, or 18%, in assets from its $10.67 billion pension plan to hedge funds.27
Abbott Abbott employs 12,000 workers in the state.28 As of December 31, 2011, Abbott invested $324 million, or 6.2%, of its $5.2 billion in pension plan assets in hedge funds.29
All State In Illinois, the company employs approximately 13,000 workers.30 In 2011 All State invested $373 million, or 8%, of its $4.7 billion pension plan in hedge funds.31
CNA CNA employs approximately 5,000 workers in the state.32 According to its most recent financial report in 2011, CNA invested $818 million, or 37%, of its $2.2 billion defined benefit plan in hedge funds.33
Exelon Corporation The company has approximately 5,000 employees in the state34 As of the end of 2012, Exelon invested $2.3 billion, or 17%, of its $13.2 billion pension and retirement benefits assets in hedge funds.35
Boeing Boeing employs 669 people in the state.36 In 2012, Boeing invested $2.5 billion in hedge funds, roughly 5% of the company’s defined benefit plan, which totals $50 billion.37
Hedge Funds Help Ensure Educational Opportunities
University of Illinois The university’s endowment funds research and public service support.38 In 2012, The University of Illinois Foundation invested approximately $366 million, or 15%, of the University of Illinois’s $2.5 billion endowment in hedge funds.39,40
University of Chicago The school’s endowment is used for development of buildings such as an early childhood education center and an astrophysics research center.41 According to its most recent report in 2012, the school’s endowment invests $1.6 billion, or 21%, of its $7.4 billion assets in absolute returns, which includes hedge funds.42
Northwestern University The university’s endowment helps to fund faculty and student research projects.43 In 2012, the university invested $1.1 billion, or 16% of its $7.1 billion in assets, in absolute returns, which are made up of hedge funds.44
Hedge Funds Help Improve the Quality of Life in Local Communities
Robert R. McCormick Foundations Dedicated to promoting citizen leadership, the Foundation funds program related to civics, communities, education, journalism, and veteran support.45 According to its most recent financial report in 2011, the Foundation invests $288 million in hedge funds, comprising 24% of its $1.2 billion assets.46
Chicago Community Trust Provides grants to organizations working to better the Chicago metropolitan area.47 As of September 30, 2011, the trust invests 5%, or $59 million of its $1.2 billion in assets in hedge funds.48
The Rotary Foundation The Rotary Foundation is one of the top two giving foundations in Illinois, donating more than $200 million annually.49 The Foundation’s focus areas include peace and conflict prevention and resolution; disease prevention and treatment; water and sanitation; maternal and child health; basic education and literacy; and economic and community development.50 In 2012 The Foundation’s allocated more than $58 million, or 7%, of its $823 million total investments to hedge funds.51
*Data listed here is updated frequently and contains the most current information in public filings.
1 “Prequin Special Report: Hedge Funds” pp. 16, October 2012, http://www.preqin.com/docs/reports/Preqin_Special_Report_Hedge_Funds_October_2012.pdf.
2 “Statistical,” Illinois Teachers’ Retirement System, December 31, 2011, pg. 115, http://trs.illinois.gov/subsections/pubs/cafr/fy11/fy11cafr.pdf. 3 “Investments,” Illinois Teachers’ Retirement System, June 30, 2012, http://trs.illinois.gov/subsections/investments/investments.htm. 4 "ISBI.illinois.gov : Welcome," State of Illinois Home : Home, accessed November 28, 2012, http://www2.illinois.gov/isbi/Pages/default.aspx . 5 “STATE EMPLOYEES’ RET I R E M E N T S Y S T E M O F I L L I N O I S A N N U A L A C T U A R I A L V A L U A T I O N A S O F JU N E 3 0 , 2 0 1 2”, p. 2, https://www.srs.illinois.gov/PDFILES/Valuations/SERS/SERS%202012.pdf. 6 "ISBI_Annual Report 2012.pdf," Illinois State Board of Investment, June 30, 2012, pg. 21, https://www.srs.illinois.gov/PDFILES/oldAnnuals/sers2012.pdf. 7 “About the Illinois Municipal Retirement Fund,” About IMRF, accessed November 28, 2012, Illinois Municipal Retirement Fund, http://www.imrf.org/info/about.htm. 8 “Laborers’ And Retirement Board Employees’ Annuity and Benefit Fund of Chicago Actuarial Valuation Report for the Year Ending December 31, 2011,” Illinois Municipal Retirement Fund, December 31, 2011, pg. 3, http://labfchicago.org/sites/default/files/GRS%202011%20Val.pdf. 9 “2010 Illinois Municipal Retirement Fund – Comprehensive Annual Financial Report,” Illinois Municipal Retirement Fund, December 31, 2011, pg. 27, http://www.imrf.org/pubs/annual_reports/2010_Comprehensive_Rpt.pdf. 10 “General Information,” General Info, accessed November 28, 2012, Chicago Teacher’s Pension Fund, http://www.ctpf.org/general_info/generalindex.htm. 11 “116th Comprehensive Annual Financial Report,” Chicago Teachers’ Pension Fund, June 30, 2011, pg. 31, http://www.ctpf.org/AnnualReports/cafr2011.pdf. 12 “116th Comprehensive Annual Financial Report,” Chicago Teachers’ Pension Fund, June 30, 2011, pg. 28, http://www.ctpf.org/AnnualReports/cafr2011.pdf. 13 “Home,” Municipal Employees’ Annuity and Benefit Fund of Chicago, accessed November 28, 2012, Municipal Employees’ Annuity and Benefit Fund of Chicago, http://www.meabf.org/about.php. 14 “Comprehensive Annual Financial Report,” Municipal Employees’ Annuity and Benefit Fund of Chicago, December 31, 2011, pg. 86, http://www.meabf.org/publications/2011_CAFR.pdf. 15 “Comprehensive Annual Financial Report,” Municipal Employees’ Annuity and Benefit Fund of Chicago, December 31, 2011, pg. 70, http://www.meabf.org/publications/2011_CAFR.pdf. 16 “Creation & Purpose of Fund,” About the Fund, accessed November 28, 2012, Cook County Pension Fund, http://www.cookcountypension.com/about_the_fund/default.aspx. 17 “Comprehensive Annual Financial Report,” County Employees’ and Officers’ Annuity and Benefit Fund of Cook County, December 31, 2011, pg. 74, https://www.cookcountypension.com/assets/1/AssetManager/2011%20CC%20CAFR.pdf. 18 “Comprehensive Annual Financial Report,” County Employees’ and Officers’ Annuity and Benefit Fund of Cook County, December 31, 2011, pg. 12, https://www.cookcountypension.com/assets/1/AssetManager/2011%20Cook%20County%20Final%20Financial%2 0Statements.pdf. 19 “Description from Website,” Service Provider | Policemen’s Annuity & Benefit Fund of Chicago, accessed November 28, 2012, Hedge Fund Focus, http://www.hedgefundfocus.com/service-provider-policemens-annuity- benefit-fund-of-chicago.
20 “Information maintained by the Legislative Reference Bureau,” Illinois Compiled Statutes, accessed November 28, 2012, Illinois General Assembly, http://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=004000050HArt.+6&ActID=638&ChapterID=9&SeqStart=4 6800000&SeqEnd=61700000 . 21 “Financial Statements for the Years Ended December 31, 2011 and 2010,”Policemen’s Annuity and Benefit Fund of Chicago, December 31, 2011, pg. 7, http://www.chipabf.org/ChicagoPolicePension/PDF/Financials/audit_reports/2011_FINAL_Audit%20Report.pdf. 22 “Financial Statements for the Years Ended December 31, 2011 and 2010,”Policemen’s Annuity and Benefit Fund of Chicago, December 31, 2011, pg. 10, http://www.chipabf.org/ChicagoPolicePension/PDF/Financials/audit_reports/2011_FINAL_Audit%20Report.pdf. 23 “Helping Building Your Tomorrow,” Laborers’ & Retirement Board Employees’ Annuity & Benefit Fund of Chicago, accessed November 30, 2012, Laborers’ & Retirement Board Employees’ Annuity & Benefit Fund of Chicago, http://labfchicago.org/. 24 “2011 Popular Report,” Laborer’s and Retirement Board Employees’ Annuity and Benefit Fund of Chicago, December 31, 2011, pg. 7, http://labfchicago.org/sites/default/files/2011_SumRep%20single%20pages.pdf. 25 “2011 Popular Report,” Laborer’s and Retirement Board Employees’ Annuity and Benefit Fund of Chicago, December 31, 2011, pg. 3, http://labfchicago.org/sites/default/files/2011_SumRep%20single%20pages.pdf. 26 “The Way Forward in Illinois,” Explore the map > Illinois > See what we’re doing in Illinois, accessed November 30, 2012, JPMorgan Chase & Co., http://www.jpmorganchase.com/corporate/Home/home.htm 27 “2011 Annual Report,” JP Morgan Chase & Co., December 31, 2011, pg. 207, http://files.shareholder.com/downloads/ONE/2171961503x0x556139/75b4bd59-02e7-4495-a84c- 06e0b19d6990/JPMC_2011_annual_report_complete.pdf. 28 “State Profile: Largest Profiles,” Career One Stop, accessed November 30, 2012, America’s Career InfoNet, http://www.acinet.org/oview6.asp?soccode=&stfips=17&from=State&id=11&nodeid=12 29 “Abbott 2011 Annual Report,” Abbott, December 31, 2011, pg. 37, http://media.corporate- ir.net/media_files/irol/94/94004/Proxy_Page/AR2011.pdf 30 “State Profile: Largest Profiles,” Career One Stop, accessed November 30, 2012, America’s Career InfoNet, http://www.acinet.org/oview6.asp?soccode=&stfips=17&from=State&id=11&nodeid=12. 31 “AllState 2011 Annual Report,” All State, December 31, 2011, pg. 181, http://www.allstate.com/Allstate/content/refresh-attachments/annual-reports/Allstate_2011_Annual_Report.pdf 32 “State Profile: Largest Profiles,” Career One Stop, accessed November 30, 2012, America’s Career InfoNet, http://www.acinet.org/oview6.asp?soccode=&stfips=17&from=State&id=11&nodeid=12. 33 “2011 Annual Report to Stockholders,” CNA Financial Corporation, December 31, 2011, pg. 110, http://www.cna.com/vcm_content/CNA/internet/Static%20File%20for%20Download/html/annualreport2011/CN A_2011_OAR/assets/2011_10K_148pg.pdf. 34 “State Profile: Largest Profiles,” Career One Stop, accessed November 30, 2012, America’s Career InfoNet, http://www.acinet.org/oview6.asp?soccode=&stfips=17&from=State&id=11&nodeid=12 35 “Exelon Corporation 12 Financial Information,” Exelon Corporation, December 31, 2012, pg. 360, http://www.exeloncorp.com/performance/investors/financialreports.aspx. 36 “Improving the Quality of Life in Illinois,” Boeing, pg. 1, http://www.boeing.com/aboutus/govt_ops/state_cards/card_IL.pdf 37 “The Boeing Company Annual Report,” Boeing, March 4, 2012, pg. 91, http://www.boeing.com/companyoffices/financial/finreports/annual/2012/annual_report.pdf. 38 “You Gift Reached Far Beyond Illinois,” Making a Gift, accessed November 30, 2012, University of Illinois Foundation, http://www.uif.uillinois.edu/mainpage.aspx?id=37 39 “Management of the Endowment Pool,” University of Illinois Foundation, pg. 4, http://www.uif.uillinois.edu/assets/content/other/AuditorsReport12.pdf. 40 “University of Illinois Endowment,” Endowment Management, accessed November 30, 2012, University of Illinois Foundation, http://www.uif.uillinois.edu/storydetail.aspx?id=80 41 “Annual Report,” 2012 University of Chicago Annual Report, accessed March 15, 2013, The University of Chicago, http://finserv.uchicago.edu/pdf/2012FinState.pdf.
42 “Consolidated Financial Statements and Supplemental Information,” The University of Chicago, June 30, 2012, pg. 42, http://finserv.uchicago.edu/pdf/2012FinState.pdf. 43 “Research at Northwestern”, Northwestern University, December 31, 2012, pg. 1, http://www.northwestern.edu/financial-operations/annual-financial-reports/2012-Financial-Report.pdf. 44 “Research at Northwestern”, Northwestern University, December 31, 2012, pg. 17, http://www.northwestern.edu/financial-operations/annual-financial-reports/2012-Financial-Report.pdf. 45 “What is the Robert R. McCormick Foundation?,” Frequently Asked Questions, accessed November 30, 2012, Robert R. McCormick Foundation, http://www.mccormickfoundation.org/page.aspx?pid=564. 46 “Consolidated Financial Statements and Schedules,” Robert R. McCormick Foundations, December 31, 2011, pg. 11, http://documents.mccormickfoundation.org/PDF/2011AuditedFinancials.pdf. 47 “All About Your Community Foundation,” About Us, accessed November 30, 2012, Chicago Community Trust, http://www.cct.org/about/ 48 “Consolidated Financial Statements and Schedules,” The Chicago Community Trust, September 30, 2011, pg. 13, http://www.cct.org/sites/cct.org/files/CCT_FinancialStatementsFY2011.pdf.. 49 The Grantsmanship Center, “Top Giving Foundations: Illinois,” http://www.tgci.com/funding/top.asp?statename=Illinois&statecode=IL. 50 Rotary International, “Annual Report 2010-2011,” pg. 13, http://www.rotary.org/RIdocuments/en_pdf/187en11.pdf . 51 Rotary International, “Consolidated Financial Statements and Report of Independent Certified Public Accountants,” pg. 16, http://www.rotary.org/RIdocuments/en_pdf/financial_statements_ri12.pdf.