Angela Miller-May took the reins of the $52.2 billion Illinois Municipal Retirement Fund (IMRF) in 2021 – a time when the pandemic and economic uncertainties clouded the financial markets. Since taking the Chief Investment Officer role, she has been busy repositioning the portfolio amid a turbulent market while diligently advocating for increased diversity in the industry.
IMRF practices what Miller-May preaches. The fund has increased its utilization of diverse-owned investment managers. It utilizes 81 investment management firms owned by ethnically diverse professionals, women, or persons with disabilities that collectively manage $13.66 billion for the plan. They include NAIC members Artemis Real Estate Partners, Clearlake Capital Partners, Valor Equity Partners and Red Arts Capital, among others.
Over her career, which includes an 11-year stint at the $10 billion Chicago Teachers’ Pension Fund, Miller-May has garnered numerous accolades. They include the Pensions & Investments 2023 Most Influential Women in Institutional Investing Award, Markets Group 2023 DEI Leadership Award, the National Association of Security Professionals (NASP) 2022 Pacesetter Award, the Institutional Investor’s 2022 DEI Leadership Award, among others.
We spoke with Miller-May, one of the few women of color overseeing a major institutional investment plan, to gain her perspectives on the current environment, diverse managers’ roles in the IMRF portfolio, and more.
NAIC: How would you describe the current business/economic environment, and how has it impacted allocations?
MILLER-MAY: On the private equity side, as of December, I think the one-year return was 2.61, and our fiscal year ends in December. That was no surprise to us because many of our managers have been marking down their valuations. The exit market has been slow. However, long-term performance has been really strong, and it remains strong. Our three-year return was at just about 19%. Our five-year return was 16%, and the 10-year return was just about 12%. We see private markets as long-term investments because they span the 10-15-year partnership life cycle. We don’t pay a lot of attention to shorter-term returns, but we look to our longer-term returns, and we pace our capital to align with those targets and ensure that we’re aligning with what the market is signaling to us. So right now, funds are coming back to market slower, and we are adjusting our pacing to the current environment.
NAIC: How have alternatives performed for the plan?
MILLER-MAY: The asset allocation target to private equity is 10%, and the asset allocation target right now to private credit is 2.5%. Ending in 2025, we’re working towards a long-term private equity target of 10% and a private credit target of 4%. At the end of December, we were at 10.1%. So, just on top of that private equity target. And for private credit, we were just at 0.5%. So, we have a lot of work to do. This past summer, we ran a private credit search. We committed about $550 million to private credit in August and just about $400 million in December for the vintage year 2024. It was such an extensive search. We wanted to try to straddle the two vintage years with the same search, but we’ve been spending time building that private credit portfolio. We’re still onboarding managers, and we’re still putting capital to work.
NAIC: What is your current allocation to alternatives?
MILLER-MAY: It’s really been challenging. Most of my team hasn’t seen this level of inflation or rapidly rising interest rates. The first ten years I’ve spent in this industry have seen low rates, low growth, and just a boring period after the global financial crisis. Soft or hard, there hasn’t really been a landing. So, just because we haven’t had a recession doesn’t mean there won’t be one. And so we’re always trying to prepare for that. Currently, we’re increasing portfolio efficiencies and balance and trying to add more defense into the portfolio while still being able to participate in any growth that happens. So, our portfolio is positioned defensively.
NAIC: You joined the Illinois Municipal Retirement Fund in 2021. What was it like coming on board during such a tumultuous time?
MILLER-MAY: I always started jobs right as things were pivoting. I started at the Chicago Teachers’ Pension Fund in 2010, right after the global financial crisis. But when I joined IMRF in 2021, I felt like the immediate market shock of COVID was subsiding. I know it was chaos outside, but I was finally doing something where I had control. I led a team, managed a portfolio, and met with people in person. We opened the office, started having managers in, and were returning to normal in 2021 from August to December. Then 2022 hits and all hell breaks loose. The Fed starts to raise rates, inflation starts, and wars start. And it was really pivotable that I could figure out how to navigate these challenging waters and maneuver this larger fund to a stronger position.
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I think challenging times test leaders, and it gave me the opportunity to gain more trust from the board and gain more respect from the team. Everything happened the way it should have.
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NAIC: What is your approach to incorporating gender and ethnic diversity in the portfolio?
MILLER-MAY: I think about when I came into this industry. I came in through Chicago Teachers, which had about 33% of its assets managed by diverse and women-owned firms. We were able to grow that to 47% before I left. So, I’m coming into an environment where it is encouraged.
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My approach now includes tackling diversity, equity and inclusion from many different vantage points and thinking and acting more strategically and intentionally about it. Some of my priorities have evolved and changed over time, but we are taking a more holistic approach here at IMRF, where one of our goals is organizational excellence. And I think diversity, equity and inclusion are a part of that.
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If we can build an inclusive culture, it becomes everyone’s responsibility in the organization to engage and build relationships with mutual respect, empathy and honesty. And that shared responsibility across my team, across the organization, leads to everybody being accountable. It can’t just be me. It can’t just be the diversity officer. It has to be everyone who is looking for diverse managers to put into the portfolio. I think it creates a systematic approach. That’s why I like having relationships with NAIC and other organizations that support diversity because I can’t think of all the ways. So, I am always learning and always understanding where there are opportunities for us to improve our approach.
NAIC: Let’s leave off with a light-hearted question. What’s your favorite movie, and why?
MILLER-MAY: I would have to say the whole Rocky series. I just love the underdog being able to win. And the other thing is the fact that Sylvester Stallone couldn’t get a movie role and decided to do Rocky himself and put his entire family to work. You can see them in different scenes, including Rocky and Rocky 2. And it makes it more special because I watched it with my two sons as they were growing up. And now that they’re adults, I still get a call or a text, ‘Mommy, they’re doing a marathon of Rocky.’ Wherever we are, it is always something that we are doing together.