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Pensacola Fire Board votes to transfer UBS real estate stake into Cohen & Steers tactical fund; manager changes recommended
Summary
After a Cohen & Steers presentation, the Pensacola Fire Board unanimously approved moving roughly $4,000,000 in UBS-held private real estate into a Cohen & Steers tactical real-estate product 'in kind,' and accepted recommendations to terminate the Poland mandate and review Wedge for replacement.
Pensacola — The Pensacola Fire Board of Trustees voted unanimously to transfer the board’s remaining UBS private-real-estate holding into a Cohen & Steers tactical real-estate fund that blends listed REITs with private-core real estate.
Larry Cole, the board’s investment consultant, told trustees the transfer would be done "in kind" so the UBS holding moves dollar for dollar into the new product, preserving the plan’s allocation while improving liquidity and applying a discounted fee arrangement offered to early clients. "This fund could take in-kind transfers, which I don't think there's any other fund out there that can do it," Brian of Cohen & Steers said during the presentation.
Cohen & Steers’ presenter described the product as 35% listed real-estate securities (REITs) and 65% private core, managed alongside an index partner (referred to in the presentation as IDR/Odyssey). The manager said the blend is intended to reduce volatility and create materially greater liquidity than a typical private-core fund by mixing daily-liquidity listed assets with scaled private holdings.
Cole framed the move as a way to exit an underperforming UBS vehicle that has been in the board’s redemption queue since May 2020 and currently shows roughly $4,000,000 in market value. He recommended moving the entire UBS position "in kind" into the Cohen & Steers fund and to review replacing underperforming active managers. "I would highly recommend you do it," Cole told trustees while summarizing his quarterly report and manager analysis.
Trustees questioned fees, long-term availability to retail investors and legal documentation. Cohen & Steers and Cole said the product is institutional-only and that the fee discount extended to this plan would be permanent for participating clients; the board’s legal reviewer (Gary) will review partnership documents and any side-letter terms required to meet state fiduciary rules.
In the same discussion, Cole recommended terminating the Poland capital management mandate and moving those proceeds into a low-cost Fidelity S&P 500 index fund. He also said the board would further evaluate Wedge and invited Wedge representatives to present an alternative product at the next meeting. The motions to transfer UBS to the Cohen & Steers product and to move Poland proceeds to the Fidelity 500 fund were each moved, seconded and approved unanimously.
The board did not adopt changes to its asset-allocation percentages as part of these votes; Cole said the in-kind transfer would preserve the plan’s existing allocation to real estate at roughly 3% of the total portfolio. He also recommended continuing to monitor Baron and DRZ small-cap managers, noting their longer-term rolling returns supported patience despite a weak recent quarter.
The board asked staff to complete document review and to implement the UBS-to-Cohen & Steers transfer on the valuation date specified by counsel and the consultant.
