Houston pension fund seeks private assets consultant

The $4.2bn pension fund wants to grow its private asset bucket to 27% of its total portfolio.

Houston Firefighters’ Relief and Retirement Fund is looking for a private assets consultant as it plans to grow its private asset bucket to 27 percent of its total portfolio.

The southern Texas pension fund is searching for one or two advisors to ramp up several private asset categories: private credit, infrastructure, co-investments and natural resources, according to the request for proposal. HFRRF has authorised a private markets’ allocation as high as 35 percent.

The retirement plan’s private asset portfolio has a 16.4 percent exposure, or $695 million, of its assets to alternatives: 11.9 percent to private equity and 4.7 percent to real estate investments.

Within the limited partner’s $498 million private equity portfolio, there is a 0.4 percent allocation to credit investments. The other concentrations in that allocation include buyouts (37 percent), secondaries (20.5 percent), venture capital (16.6 percent), distressed debt (15 percent), special situations (10.3 percent), and direct investments (0.2 percent).

Competing firms must meet certain thresholds for each asset class on which they seek to advise HFRRF. To qualify, they must currently be advising clients with an aggregate of $50 billion for private equity, $10 billion for private credit, $75 billion for real estate, $10 billion for infrastructure, $5 billion for co-investments and $1 billion for natural resources.

The deadlines for RFP submissions is 31 July.

HFRRF invested nearly $100 million in three managers across three distinct strategies in 2017: distressed debt with Lone Star FundsLone Star Fund X ($50 million); subordinated and mezzanine debt with Torchlight InvestorsTorchlight Debt Opportunity Fund VI ($20 million); and direct lending with EQT’s EQT Mid-Market Credit II ($24.4 million).

The fund manages the investments of 3,500 active firefighters and 2,100 retirees and beneficiaries.

– Johnny Madrid contributed to this report.