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Searches and Hires

Chicago Police fund boosts hedge fund-of-funds portfolio

Updated with correction.

Chicago Policemen's Annuity & Benefit Fund will invest an additional $10 million in a customized hedge fund-of-funds strategy managed by Plucios Management on Dec. 1.

Trustees of the $2.7 billion fund approved an initial allocation of $23.5 million to the fund in December 2017. As of Sept. 30, the policemen's plan had $23.5 million invested in the long/short equity hedge fund of funds, said Aoifinn Devitt, the fund's chief investment officer, in an email.

Ms. Devitt said an additional $30 million likely will be invested in the Plucios separate account when the policemen's fund receives the full proceeds from the liquidation of GAM's unconstrained/absolute return bond fund. GAM announced in September it would return investor capital after the fund's portfolio manager was suspended for alleged violation of company policies.

The policemen's fund invested in the GAM fund in July 2014; the amount of the original investment was not released.

The board also is ready to commit assets to core-plus and value-added real estate funds, according to agendas for its November meetings.

On Nov. 14, trustees will consider commitments to core-plus real estate funds Blackstone Property Partners, managed by Blackstone Group; Brookfield Premier Real Estate Partners, managed by Brookfield Asset Management; Cabrera Realty Fund, managed by Cabrera Capital Partners; and Oaktree Real Estate Income Fund, managed by Oaktree Capital Management (OAK).

Value-added real estate funds under review by the board on Nov. 27 are Long Wharf Real Estate Partners VI, managed by Long Wharf Capital; New Mountain Net Lease, managed by New Mountain Capital; PCCP Equity VIII; TA Realty Associates Fund XII, managed by TA Associates Realty; and TerraCap Partners IV, managed by TerrCap Management.

Ms. Devitt said the fund "will be flexible about the amounts (invested) and the number of managers chosen," noted the total investment for each subasset class will be between $10 million and $25 million.

She noted the fund's real estate target is 7% and the current exposure to the asset class is 3.22%.

Funding for the real estate hires will come from a combination of cash and from the allocations to existing real estate managers. Ms. Devitt said the amount to be drawn from individual existing managers has not been determined.