Secondaries sales at Dallas Police and Fire Pension System continued in March, with nine transactions generating around $70 million in cash inflows for the pension.
DPFP sold its stakes in eight Lone Star fund, vehicles that invested in distressed debt and real estate, a real estate fund managed by London-based M&G Investments, according to DPFP’s monthly investment report for March.
Last month, Private Equity International reported that DPFP was planning to sell stakes in 10 funds, which include all nine transactions that ended up closing. The remaining fund that did not sell is Lone Star Fund III, a real estate fund with a vintage year of 2000 where DPFP’s stake was valued at $49,281 as of 30 September.
Based on the September valuations, the most recent figures available, it appeared DPFP sold each of the nine stakes last month at a discount.
The $2.1 billion pension fund first announced plans to make secondaries sales of fund stakes from a private investment portfolio worth $613.9 million in December, as reported by sister title Secondaries Investor.
Including previously reported secondaries sales and the nine most recent ones, DPFP has realised $244.9 million so far. There was no indication in the latest monthly report about future sales.
As of 31 March, DPFP held $421 million in cash, accounting for 20 percent of its total fund and well-above its 2 percent target allocation. DPFP initially sought to raise cash via asset sales and termination of some manager relationships for potential cash flow needs, and although those needs have subsided recently, its investment consultant NEPC recommended that the pension hold on to those excess cash assets.
The pension was heavily overweight in real estate, with 24 percent actual allocation, versus a 12 percent target allocation, according to the March investment report. The pension’s private debt portfolio, however, tempered even more, representing 0.68 percent of the total assets, down from 2.4 percent in February. DPFP’s target allocation to private debt is 5 percent.
There is currently a bill in the Texas legislature to bail out DPFP, and it passed unanimously in the House Pensions Committee on Wednesday, as reported by Dallas News.
DPFP was not available to comment.