Dallas Police & Fire Pension System hired Evercore to sell a portion of its private investment portfolio at a time when withdrawals from the pension fund's Deferred Retirement Option Plan are skyrocketing, documents prepared for Thursday's board meeting show.
The current status of the sale could not immediately be learned.
According to the meeting documents, Evercore received 19 bids in late November.
As of June 30, the $2.7 billion pension fund's private investments portfolio allocation was 23% real estate, 15% private equity, 10% natural resources, 6% infrastructure and 3% private debt. Targeted for sale are 10 infrastructure and energy funds with a net asset value of $263.1 million and $56 million in unfunded commitments; 16 buyout, growth and special situations funds with a NAV of $265 million and $172.5 million in unfunded commitments; and 11 real estate funds with a NAV of $89.3 million and $49.3 million in unfunded commitments.
The board voted Thursday to immediately suspend DROP withdrawals, three days after Dallas Mayor Mike Rawlings filed a lawsuit against the pension fund, arguing the pension fund's decision to continue making lump-sum DROP payments, totaling nearly $500 million over the past few months, could bring insolvency in 10 years as opposed to the previously projected 15 years.
The board also directed the pension fund's staff Thursday to prepare DROP policy changes for the Jan. 12 board meeting.
DROP withdrawal requests increased after an August board meeting at which officials discussed reduced benefits as a way to improve funding.
In a statement Thursday, the pension fund said that although it decided to halt DROP withdrawals, it continues to oppose the basis for Mr. Rawlings' lawsuit. The lawsuit claims the pension fund violated its “ministerial duties” by allowing DROP withdrawals to continue.
The pension fund also noted in the statement that it will work with investment professionals to sell selected assets to help with DROP requests.
Pension fund officials could not immediately be reached for additional information.
