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Pension board rescinds remaining Morgan Stanley real-estate redemptions, keeps distributions to cash
Summary
The Allentown City Pension Board voted to rescind the remaining scheduled redemptions from its Morgan Stanley real-estate allocations and to continue having distributions/dividends paid to the funds as cash. The motion passed by roll-call vote.
Trustee John Strobula moved that the board rescind the remaining partial redemptions from Morgan Stanley real-estate holdings and to continue taking quarterly income/distributions from the real-estate vehicle as cash; a trustee seconded the motion and the board approved it by roll call.
Pat from Marquette reviewed the history of the Morgan Stanley redemptions: partial redemptions were requested in 2022 and the plans have received roughly 70% of the originally requested redemptions to date (about $5.015 million and $3.25 million returned to the Police and Fire plans, respectively), with additional amounts expected to come back as liquidity improves. Marquette recommended rescinding the remaining redemption requests to retain exposure while allowing incoming distributions to bolster cash balances.
Trustee Strobula formally moved to rescind future scheduled redemptions “with the understanding that we’ll continue to take the income and put it to cash on a quarterly basis.” Trustee John Strobula made the motion; another trustee seconded it. The board approved the motion on a roll call (Yes votes recorded from trustees present; one trustee absent). The roll call recorded Yes votes from Bina Patel, Jeff Glaser, Ebi Balag, Alex Kuskravage, Rob Bush, Andrew Weiss and John Strobula; Tim Bruce was absent.
Marquette and trustees discussed timing and mechanics: rescinding requires a letter sent to the manager prior to the quarter-end (the staff noted a practical deadline about June 20 for June 30 distributions). Trustees emphasized continuing to monitor real-estate liquidity and redemptions as market conditions evolve.
Ending: The board directed staff to send the rescission letter and to report back on the effect of holding the remaining allocation versus completing the previously scheduled redemptions.
