Ohio Police & Fire nixes distressed debt investment

 The $14.9 billion pension fund has decided to scrap its planned $40 million commitment to the Black Diamond Opportunity Fund IV.  

The board of the $14.9 billion Ohio Police & Fire Pension Fund has recently decided to cancel its planned investment in a Black Diamond distressed debt fund.

“After further evaluation of the mid-sized distressed debt market in general, the board has decided to rescind a pending commitment to Black Diamond Opportunity Fund IV and to not make any new commitments to the space at this time,” said the pension’s recent board meeting documents. “OP&F expects to continue to evaluate middle market opportunities for possible investment going forward.”  

The pension plan originally picked the fund for a $40 million investment in October 2014 and contract negotiations were still pending. A pension fund spokesman declined further comment on the decision.

At the 29 April board meeting, the pension’s real estate consultant, The Townsend Group, presented Ohio P&F’s real estate performance report through 31 December. The pension fund’s real estate portfolio returned 3.8 percent net for the quarter and 14.8 percent for the year, the report showed. For the three-year period, the real estate investments returned 13.8 percent, while for five years, the portfolio was up 13.9 percent.

The board also approved a recommendation from its investment staff and private equity consultant Torrey Cove to commit $40 million to the TA XII fund, a venture capital and private equity fund from TA Associates. The firm is targeting $4 billion in commitments and will focus on North America, Europe and Asia Pacific. Ohio P&F had invested $21.5 million in the predecessor TA XI.

A recommendation to commit up to €38 million to EQT VII, a private equity fund from Stockholm-headquartered EQT Partners, was also approved at the meeting. EQT VII will focus on Northern Europe and has a target fund size of €5.25 billion.