DPFP to focus on emerging markets debt

Meanwhile, the pension fund plans to deplete its private credit allocation to zero.

The Dallas Police and Fire Pension System approved a new asset allocation plan last month to be fleshed out over the next year.

The Texas-based pension fund approved a new portfolio-division strategy in November with the hope of it being fully implemented by the end of 2019. The new plan includes liquidating the fund’s private debt investments and focusing on emerging markets debt.

The target for private debt will drop from 5 percent to zero, and the emerging market debt allocation will change from 6 percent to 4 percent. Currently, private debt makes up 0.5 percent of the portfolio, while that figure for emerging market debt is 1 percent.

The combined assets were valued at $30 million at the end of October, with $11 million for private debt investments and $19 million for emerging markets debt investments. The retirement plan aims to have around $81 million invested in emerging markets debt by the end of 2019.

The new asset allocation also plans to completely sell down the pension fund’s real estate and infrastructure investments.

The board will talk about the new allocation to emerging markets debt at its Thursday meeting, according to pension fund documents. It is set to discuss the funding of this new allocation, as well as learn more about the new asset class from representatives of Meketa Investments.

The board predicts a $62 million commitment to the Ashmore Emerging Markets Blended Debt Fund – which it has previously invested in – in the near future once the funding becomes available, the meeting documents said.

Dallas Police and Fire Pension System is an independent pension fund covering more than 10,000 employees in Dallas, Texas. The pension board manages a portfolio worth over $2 billion.