Pacific Corporate Group, a private equity investment adviser, is spinning off a unit into a separate employee-owned firm after the parent company was hit by a string of staff departures last year.

Last month the Teachers' Retirement System of the State of Illinois said it could replace Pacific Corporate Group just seven months into its contract due to concerns over staff turnover. The company acts as a gatekeeper for the fund's private equity investments, providing advice on how its money should be allocated. The pension fund is due to make a decision in its board meeting on May 18.