Fresno County (Calif.) Employees’ Retirement Association purchased a $40 million limited partnership interest plus a potential $4 million future commitment to the Colony Distressed Credit Fund from Swiss Re.
The $2 billion system had previously decided to commit $30 million to Colony Investors IX Fund, but Colony Capital doesn’t expect to raise the new distressed debt fund until it has finished investing the assets in Colony Distressed Credit Fund, said Jeffrey MacLean, president and CEO of Wurts & Associates, the system’s consultant.
However, Swiss Re wanted to sell its interest in Colony Distressed Credit, and Wurts negotiated a purchase by Fresno County in which Swiss Re walked away from the $2.66 million it had already invested and would pay fees and penalties for defaulting on a June commitment.
As a result, the system is purchasing a performing investment in the fund currently valued by Colony Capital at $5.03 million as of June 30 for $1.14 million, which is the delinquent $1.88 million June capital call less fees and expenses, he said.
Separately, the board voted to discontinue a program managed by SSgA in which it equitized its administrative cash because the amount of cash equitized has been much less than originally expected and the administrative burden to properly manage the program. The program will be resumed when the size of cash available to equitize increases. The amount of the increase necessary to restart the program wasn’t available at press time.