Five finalists are in the running for management of private equity secondary funds for the $2.6 billion Chicago Policemen's Annuity & Benefit Fund, Thomas A. Beyna, a Chicago police officer, president of the board and chair of the investment committee, said in an email.
The search for two firms to manage $25 million each in secondary funds commenced in October with the assistance of investment consultant NEPC.
Mr. Beyna said trustees selected the following managers to make presentations at the board's Feb. 24 investment committee meeting Adams Street Partners; Auldbrass Partners; Coller Capital; Glendower Capital; and HarbourVest Partners.
The new hires are part of the pension fund's move back into private equity after a retreat about two years ago.
The fund's target allocation to private equity is 5%. The current allocation to private equity is 0.8% and is invested in a venture capital fund managed by Invesco, Mr. Beyna said.
In a move to improve liquidity, trustees authorized investment staff to exit private equity investments and the $80 million private equity funds-of-funds portfolio was sold at the end of 2017.
In interview at the time, Aoifinn Devitt, the fund's CIO, said the pension fund hadn't committed new assets to private equity since 2009 and the portfolio was "frozen in time" and in harvest mode.
"The private equity portfolio was pretty diversified, but we decided that given our liquidity profile, private credit was much more appealing with shorter lockups, a current cash coupon and a mitigated J-curve," Ms. Devitt said.
Mr. Beyna explained in an email that the policemen’s fund can begin to invest in illiquid private equity again because “under Illinois statute, our fund will begin receiving actuarial determined contributions ... in 2021 and the increase in contributions will improve our liquidity profile.”
