Chicago Policemen's Annuity & Benefit Fund will invest $25 million in Dorchester Capital Secondaries Offshore IV, a fund of hedge fund secondary interests, managed by Dorchester Capital Advisors.
Trustees of the $2.4 billion pension fund approved the investment recommendation of Aoifinn Devitt, chief investment officer, at a meeting Tuesday.
The pension fund will invest in a share class of the fund that is designed to generate a minimum cash yield of 5% per year, Ms. Devitt said in an e-mail. The investment will be classified as an opportunistic credit investment, pending potential reclassification after the pension fund completes an asset allocation study, she added.
Dorchester Capital was among the money managers that responded to the pension fund's recent RFP for income-generating investment strategies. The search parameters required that managers produce a cash coupon of at least 5% with a seven-year lockup or a cash coupon of at least 10% in exchange for a 10-year lockup with a two-year extension.
The RFP indicated that one or more firms might be hired for the total allocation of between $10 million and $40 million.
Ms. Devitt said three managers vying for the income-generating allocations — Crestline Investors, J.P. Morgan Asset Management (JPM) and Ullico Investment Advisors — will make presentations at the board's Jan. 20 investment committee meeting. Crestline will be pitching investment in Crestline Opportunity Fund III, a credit fund, and JMPAM and Ullico will focus on their infrastructure investment strategies, Ms. Devitt said.