Chicago Policemen's Annuity & Benefit Fund board of trustees authorized a search for an investment consultant.
The search comes as part of the regular rebidding process as the expiration nears of the five-year contract of current consultant NEPC, said James P. Maloney, a trustee and acting chief investment officer of the $2.9 billion defined benefit plan, in an e-mail.
The consultant RFP will be posted in the second week of August on the pension fund’s website, Mr. Maloney said. NEPC may rebid.
The pension fund also plans to issue searches for direct lending and opportunistic credit allocations in October, Mr. Maloney said, noting the details of these new asset class investments will be the subject of “more discussion” before issuing RFPs.
Also at their July 30 meeting, trustees increased the fund’s hedge fund weighting to 5% of plan assets from 3% and approved allocations to three hedge funds-of-funds managers hired in May: KKR-Prisma, $75 million; Permal Group, $50 million; and Pluscios Management, $20 million.
Mr. Maloney said the increase in the overall allocation to hedge funds of funds will be covered by rebalancing and a reduction in U.S. equity.
The board also terminated the contracts of the fund’s previous hedge funds-of-funds managers Aetos Alternative Management and K2 Advisors, which managed $51 million each.
Finally, Mr. Maloney said the board accepted the recommendations of NEPC and actuary Gabriel Roeder Smith to lower the assumed rate of return to 7.5% from 7.75%.
