San Antonio Fire & Police shifts $45m to private debt funds
The San Antonio Fire & Police Pension Fund has committed $45m (£36.1m) to private debt as a part of a plan to reallocate investment from underperforming emerging markets equity funds.
The $3.7bn pension fund’s board discussed modifying its allocations at a meeting on 18 March 2024.
According to minutes from the meeting, the board elected to eliminate its six per cent emerging markets equity policy target and increase targets for US small/mid-cap equity (two per cent), non-US developed equity (one per cent), non-US developed small-cap equity (two per cent), and private equity (one per cent).
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The committee discussed and agreed a re-up commitment of $20m with Boston-based HarbourVest Co-Investment Fund VII, which will focus on asset origination, risk-transfer and regulatory capital solutions, and market dislocation opportunities to deliver current income and long-term capital appreciation.
The pension fund is currently invested in Funds V and VI. HarbourVest Co-Investment Fund V is a second quartile fund in terms of internal rate of return (IRR). As of 30 September 2023, the pension fund’s investments in Fund V and Fund VI have IRRs of 20.79 per cent and 7.96 per cent, respectively.
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The committee also voted to recommend to the board to commit $25m to New York-based 400 Capital Asset Based Term Fund IV, and this motion was carried unanimously.
The fund will focus on asset origination, risk-transfer and regulatory capital solutions, and market dislocation opportunities to deliver current income and long-term capital appreciation.
The pension fund is currently invested in Fund III, which has an IRR of 11 per cent as of 31 December 2023.
The committee voted to recommend the termination of the fund’s two emerging markets equity managers, Fidelity Institutional Asset Management Concentrated Emerging Markets Fund and the WCM Focused Emerging Markets Fund and reallocate $140m of the proceeds among six existing managers.
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