Key Takeaways
- • Kent Custer, investment chief of the Illinois Police Officers' Pension Investment Fund since May 2021, is executing an aggressive private markets buildout with a 20 percent target allocation across private equity, private credit, real estate, and infrastructure.
- • The $15 billion fund has appointed Oaktree and Lexington as managers for private credit and private equity respectively, hired Albourne as consultant, and is conducting active searches for private infrastructure and real estate managers.
- • Illinois Police manages combined assets across 357 separate Illinois police pension plans and represents Custer's third major pension restructuring engagement, following prior roles at the Illinois Prepaid Tuition Trust Fund (2011) and Dallas Police and Fire Pension System (2018).
- • The fund's private markets allocation targets include seven percent private equity, five percent private credit, five percent real estate, and three percent infrastructure, demonstrating a diversified approach to alternative assets.
- • Greg Turk, formerly of the Teachers' Retirement System of Illinois, has been hired as deputy CIO and director of private markets to lead the expansion effort alongside Custer.
Summary
Kent Custer has transitioned from restructuring troubled pension systems into building a comprehensive alternative investment program at the Illinois Police Officers' Pension Investment Fund, which he joined as the plan's first investment chief in May 2021. After five years of establishing foundational portfolio infrastructure across the fund's $15 billion in assets—which represent the combined retirement savings of 357 separate Illinois police pension plans—Custer is now executing a substantial private markets expansion designed to strengthen long-term returns while maintaining disciplined risk management.
The fund launched its private markets program in 2024 and has already secured key manager relationships. Oaktree and Lexington have been selected to manage private credit and private equity allocations respectively, while Albourne serves as the fund's private markets consultant. The organization is currently conducting searches for additional private infrastructure and private real estate managers to round out its alternative investment infrastructure. Greg Turk, recruited from the Teachers' Retirement System of Illinois, has joined as deputy CIO and director of private markets to oversee the buildout.
Illinois Police has established a 20 percent target allocation to private markets, with specific sub-allocations of seven percent to private equity, five percent to private credit, five percent to real estate, and three percent to infrastructure. This allocation strategy reflects a measured approach to alternative assets—substantial enough to enhance portfolio diversification and capture illiquidity premiums, yet conservative relative to institutional peer benchmarks that frequently exceed 30 percent in private markets exposure.
Custer's appointment to build the Illinois Police fund represented a departure from his previous crisis-management work. He had previously restructured the Illinois Prepaid Tuition Trust Fund beginning in 2011 and undertaken a similar engagement with the Dallas Police and Fire Pension System in 2018, building a reputation for stabilizing pension systems facing structural challenges. His selection as a finalist for the Allocators' Choice Award for public pension CIO of the year underscores institutional recognition of his execution capabilities in the defined-benefit pension space.
The fund launched its private markets program in 2024 and has already secured key manager relationships. Oaktree and Lexington have been selected to manage private credit and private equity allocations respectively, while Albourne serves as the fund's private markets consultant. The organization is currently conducting searches for additional private infrastructure and private real estate managers to round out its alternative investment infrastructure. Greg Turk, recruited from the Teachers' Retirement System of Illinois, has joined as deputy CIO and director of private markets to oversee the buildout.
Illinois Police has established a 20 percent target allocation to private markets, with specific sub-allocations of seven percent to private equity, five percent to private credit, five percent to real estate, and three percent to infrastructure. This allocation strategy reflects a measured approach to alternative assets—substantial enough to enhance portfolio diversification and capture illiquidity premiums, yet conservative relative to institutional peer benchmarks that frequently exceed 30 percent in private markets exposure.
Custer's appointment to build the Illinois Police fund represented a departure from his previous crisis-management work. He had previously restructured the Illinois Prepaid Tuition Trust Fund beginning in 2011 and undertaken a similar engagement with the Dallas Police and Fire Pension System in 2018, building a reputation for stabilizing pension systems facing structural challenges. His selection as a finalist for the Allocators' Choice Award for public pension CIO of the year underscores institutional recognition of his execution capabilities in the defined-benefit pension space.
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