Illinois TRS adopts ILPA fee template

Illinois Teachers’ Retirement System has adopted the fee reporting template from the Institutional Limited Partners Association, it said earlier this week in a statement.

The new reporting template, which ILPA initially announced at the beginning of the year at the Private Equity International CFOs & COOs Forum, standardizes the way private equity fund managers detail the fees they charge public pension systems.

“The ILPA template is a great first step in getting the private equity industry on a level playing field in the way fees and the cost of these investments is reported and tracked,” TRS executive director Dick Ingram said in the statement.

The pension plan said that historically, it has had to reconcile a multitude of different reporting formats that varied in detail and terminology considering that each private equity fund manager independently developed their own reporting standards and formats.

“Those differences often made it difficult to quickly determine and analyze the true costs of these investments,” TRS said in the statement. Ingram added that the ILPA template will allow to better understand the risks and rewards of the private equity asset class.

TRS said that it will begin to gradually implement its use of the ILPA template with new private equity opportunities approved by its board.

TRS will also use the new template as the basis of discussions with state legislators working to mandate a standard fee reporting template for all of Illinois’ public pension systems.

Parallel to the ILPA fee reporting template, several states including California and Illinois have proposed to impose transparency requirements when reporting certain fees and terms related to alternative investment funds, including private equity funds.

The California State Legislature passed the Assembly Bill 2833 on the issue at the end of August after several amendments.

TRS has $5.4 billion in private equity, or 12.1 percent of its portfolio, as of 30 June.