Searches and Hires

Chicago police fund preps real estate searches, commits $15 million

The Chicago Policemen's Annuity & Benefit Fund will launch searches next week for two managers to build out the $85 million real estate portfolio.

At a board meeting Thursday, trustees authorized a search for one manager each to run between $15 million and $20 million in a closed-end value-added real estate fund and in a core-plus real estate fund (open- or closed-end), confirmed Aoifinn Devitt, chief investment officer, in an email.

Ms. Devitt said the new managers will help to bring the $2.6 billion pension fund's real estate allocation closer to the 7% target from 3.5% currently. Funding for the new hires will be from portfolio distributions, she said.

The RFP will be posted on the fund's website on Sept. 4 and proposals are due Sept. 28.

Separately, the pension plan committed $15 million to Lone Star Fund XI. The real estate strategy will focus on investment in non-performing and subperforming single-family residential real estate debt, corporate debt and consumer debt in the U.S. and Europe.

The plan committed $15 million in 2016 to the previous fund in the series managed by Lone Star Funds.

Also, the pension fund named finalists in its search for a manager to run $50 million in active local currency emerging markets debt: Ashmore Group, BlackRock (BLK), Grantham, Mayo, Van Otterloo & Co., Lazard Asset Management and Wellington Management.

The firms will present their strategies to the fund's investment committee meeting on Sept. 24. The hire will be the fund's first to emerging market debt. Funding will come from reductions of $25 million from existing fixed-income managers and $25 million from existing emerging markets equity managers. No managers will be terminated.