Dallas Police & Fire Pension Replaces Manulife with Arrowstreet in $143M Equity Shift

The Dallas Police and Fire Pension System has selected Arrowstreet Capital to manage up to 6% of its portfolio through global equity strategies, replacing an underperforming Manulife Investment Management mandate.

Trustees authorized the change at their July meeting following a search that began early this year and included four finalists. Arrowstreet will manage a combination of long-only and equity-extension strategies, according to the system’s meeting summary.

Equity-extension strategies generally combine traditional long positions with short positions intended to increase exposure to managers’ highest-conviction investment views. Unlike conventional long-only portfolios, the structure allows managers to potentially benefit from stocks expected to underperform while maintaining net exposure to equities.

Manulife managed $135.6 million for the pension as of March 31. Its global equity strategy returned 14.8% for the one-year period, trailing the MSCI ACWI Net Index’s 20% gain. The mandate also lagged its benchmark over the three- and five-year periods, returning an annualized 14.1% and 9.1%, respectively, compared with 16.6% and 9.5% for the index, according to Meketa Investment Group.

The pension’s public equity portfolio totaled approximately $1.21 billion at quarter-end and gained 15.5% over the preceding year, exceeding its policy benchmark’s 14.6% return. The overall system held approximately $2.25 billion.

DPFP is also rebuilding its private-markets exposure, which represented approximately 12% of assets at the end of March, below its 18% target. Its annual pacing plan calls for selecting four to six private-market funds during 2026 across strategies that may include private equity, private credit, real estate and natural resources.