Dallas Police & Fire Pension System is liquidating its investments with seven managers, totaling roughly $156 million, said a recently released summary of board meeting minutes.
The $2.1 billion pension fund earlier this month approved liquidating its investments with equity managers Eagle Asset Management, Mitchell Group and RREEF; emerging markets debt manager Ashmore Group and global asset allocation mangers Grantham, Mayo, Van Otterloo & Co. and Putnam Investments.
“Staff and (investment consultant) NEPC believe it is not reasonable or necessary to retain managers with only minor account balances as it is more efficient to maintain larger core relationships,” said a Dec. 8 letter from the investment staff to the pension fund board. The decision also comes after a review of the pension fund's cash-flow needs, the letter said. The eliminated managers ran a total of $125.3 million for the pension fund. Each manager ran $35 million or less in one or more strategies.
Separately, the pension fund approved liquidating its roughly $30.7 million investment in J.P. Morgan Asset Management's Infrastructure Investments Fund to reduce its over allocation to infrastructure and real assets.
JPMAM continues to manage a total of $59.4 million for the pension fund in its Asian Infrastructure & Related Resources Opportunity Fund; Asian Infrastructure & Related Resources Opportunity Fund II; and Global Maritime Investment Fund.
As of Nov. 29, the pension fund had an 8.1% allocation to infrastructure and 12% to real assets, compared to targets of 5% for each.
Kelly Gottschalk, the pension fund's executive director, previously told Pensions & Investments that the pension fund's recent cash-flow concerns were primarily related to the high withdrawals from its deferred retirement option plan.
Following a record $523 million in withdrawals over three months, the pension fund board voted Dec. 8 to temporarily suspend DROP withdrawals. It will decide Thursday whether to lift the suspension on monthly withdrawals. A hearing Jan. 17 could decide whether lump-sum withdrawals may once again be permitted.
Ms. Gottschalk added at the time that the uncertainty over how long lump-sum withdrawals can be suspended and what reforms the state Legislature will or will not approve put the pension fund's asset allocation up in the air, and that the pension fund is not currently adding any new strategies to its investment lineup.
