Chicago Policemen’s fund commits $70 million to 2 funds, lowers assumed rate of return

Chicago Policemen's Annuity & Benefit Fund concluded its search for income-generating investment strategies with the selection of an infrastructure manager and a credit specialist.

Trustees approved a $50 million commitment to Ullico Infrastructure Fund from the $2.4 billion pension fund. The commitment to the fund, managed by Ullico Investment Advisors, represents an increase in the pension fund’s allocation to infrastructure, said Aoifinn Devitt, chief investment officer, in an email. The infrastructure allocation will be formally doubled to 4% of plan assets in the recommendations accompanying the asset-liability study being prepared by NEPC, the fund’s investment consultant, Ms. Devitt said.

Also, Crestline Investors’ Crestline Opportunity Fund III received a $20 million commitment, which after funding will bring the fund close to its 5% target allocation to private credit, Ms. Devitt said.

The first of the pension fund’s income-generating investment commitments was $25 million to the Dorchester Capital Secondaries Offshore IV, a fund of hedge fund secondary interests, managed by Dorchester Capital Advisors and approved in December. This investment will be classified as an opportunistic credit investment, pending potential reclassification in the forthcoming asset allocation study, Ms. Devitt said.

The pension plan will invest in share classes in all three funds that are designed to generate a minimum cash yield of 5% per year.

Separately, trustees lowered the fund’s actuarial target rate of return to 7.25% from 7.5%.