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Obas and Attachments for the Sep DALLAS FORT WORTH INTERNATIONAL AIRPORT COMMITTEE MEETINGS CONFERENCE CALL September 1, 2020 Retirement/Investment Committee – 12:30 p.m. Operations Committee – 12:40 p.m. Finance/Audit Committee – 12:50 p.m. Concessions/Commercial Development Committee – 1:05 p.m. Requests for interpretive services must be made 48 hours prior to this meeting by contacting Donna Schnell at 972 973-5752 or [email protected] or T.D. 1-800-RELAY-TX (1-800-735- 2989) for information or assistance. To register to speak at the full Board meeting, please call 972 973-5752 by 5:00 p.m. on September 2, 2020. To listen to the Committee meetings please call 888-455-3052 by 12:30 p.m. on September 1, 2020. When prompted, enter the code 1158038. Consent Agenda – all items under this heading are a part of the Consent Agenda and require little or no deliberation by the Board. Approval of the Consent Agenda authorizes the Chief Executive Officer or his designee to implement each item in accordance with staff recommendation. A closed executive session may be held with respect to a posted agenda item if the discussion concerns one of the following: 1. Contemplated or pending litigation or matters where legal advice is requested of the Board’s Legal Counsel. Texas Government Code Section 551.071. 2. Discussion concerning sale or lease of real property, or negotiated contracts for donations to the Board, when such discussions would have a detrimental effect on the negotiating position of the Board. Texas Government Code Section 551.072. 3. Personnel matters involving discussions of the qualifications or performance of identifiable individuals already employed or being considered for employment by the Board. Texas Government Code Section 551.074. 4. The deployment, or specific occasions for implementation, of security personnel or devices. Texas Government Code Section 551.076. AGENDA RETIREMENT/INVESTMENT COMMITTEE MEETING Tuesday, September 1, 2020 12:30 p.m. RETIREMENT/INVESTMENT COMMITTEE 1. Approve Minutes of the Retirement/Investment Committee Meeting of August 4, 2020. Discussion Item 2. Quarterly Investment Report – Jack Evatt, AndCo Consulting. Action Items for Consideration James Mauldin 3. Approve an Asset Management Agreement with Marathon Asset Management for their Distressed Credit Fund, in a commitment amount of $7.5 million. 4. Approve an Asset Management Agreement with BlackRock, Inc. for participation in BlackRock IX, a direct lending fund, in a commitment amount of $7.5 million. 5. Approve an Asset Management Agreement with Patron Capital for their Patron Capital Fund VI, in a commitment amount of 6 million Euro (approximately $7 million). 6. Approve an Amended and Restated Limited Partnership Agreement for the Lone Star Opportunities Fund V, LP. Retirement/Investment Committee Meeting Agenda – September 1, 2020 Page 1 of 1 DALLAS FORT WORTH INTERNATIONAL AIRPORT BOARD OFFICIAL BOARD ACTION/RESOLUTION Date Committee Subject Resolution # 09/03/2020 Retirement Approve an Asset Management Agreement with Marathon & Asset Management Investments Action That the Chief Executive Officer or designee be authorized to enter into an Asset Management Agreement with Marathon Asset Management for their Distressed Credit Fund, in a commitment amount of $7.5 million. Description • Marathon is one fo the largest stressed and distressed investors in the world. Since the Global Financial Crisis, the firm has invested over $10 billion in the space. Current total assets under management are almost $17 billion. • The strategy will target investments in deeply stressed companies or issuers going through, or that may benefit from, a restructuring process. The opportunity set includes bankruptcy reorganizations, liquidations, distressed exchanges, Debtor-In-Possession financings, dislocated corporate credits, and rescue lending. Because of the dislocation in credit due to the COVID-19 driven economic retrenchment, it is expected to generate a net IRR of 20% and a net equity multiple of 1.7X. • The management fee of 1.25% on invested capital (possibly falling to 1% based on total AndCo client commitments) and 20% incentive after an 8% hurdle is investor friendly. • Funding will come from distributions from existing investments across the portfolio. Justification • This action will provide additional diversification for the portfolio, with an experienced and top tier investment manager, while growing the under-target non-core fixed income allocation. D/S/M/WBE Information • Not Applicable Contract # Agreement # Purchase Order # Action Amount Revised Amount $0 $0 For Information contact Fund Project # External Funding Source Amount James Mauldin $0 3-5447 Resolution # Additional Information Additional Attachments: N BE IT RESOLVED BY THE DALLAS FORT WORTH INTERNATIONAL AIRPORT BOARD That the Chief Executive Officer or designee be authorized to enter into an Asset Management Agreement with Marathon Asset Management for their Distressed Credit Fund, in a commitment amount of $7.5 million. Approved as to Form by Approved as to Funding by Approved as to M/WBE by Rodriguez, Elaine Underwood, Max Burks Lee, Tamela Legal Counsel Vice President Finance Vice President Business Diversity Aug 19, 2020 10:31 am Finance and Development Aug 19, 2020 7:31 am Business Diversity and Development Aug 19, 2020 4:25 pm SIGNATURE REQUIRED FOR APPROVAL Approved by Department Head Pending Aug 18, 2020 9:29 am Chief Executive Officer Date DALLAS FORT WORTH INTERNATIONAL AIRPORT BOARD OFFICIAL BOARD ACTION/RESOLUTION Date Committee Subject Resolution # 09/03/2020 Retirement Approve an Asset Management Agreement with BlackRock, & Inc. Investments Action That the Chief Executive Officer or designee be authorized to enter into an Asset Management Agreement with BlackRock, Inc. for participation in BlackRock IX, a direct lending fund, in a commitment amount of $7.5 million. Description • BlackRock is the largest asset management firm in the world. In 2018, it acquired the talents of Tennenbaum Capital, a direct lending specialist with over two decades in the space. • Since 2000, the now-BlackRock team has invested over $19 billion in 700-plus transactions. Even more impressive is its cumulative loss ratio of 1.45% across all loans. • The objective of Fund IX is to provide debt financing to meet the distinct and underserved needs of North American middle-market companies. BlackRock will generally target healthy businesses that are seeking capital for various objectives, including growth, acquisitions, refinancings/recapitalizations, expansion stage venture lending, and leveraged buyout activity. The strategy is expected to generate a high current income of over 6% with a total net return of 10%. • The management fee of 1.15% on invested capital and 15% incentive after a 7% hurdle is very investor-friendly. • Funding will come from existing investments across the portfolio. Justification • This action will provide additional diversification for the portfolio, with a top tier investment manager, while growing the under-target non-core fixed income allocation. D/S/M/WBE Information • Not Applicable Contract # Agreement # Purchase Order # Action Amount Revised Amount $0 $0 For Information contact Fund Project # External Funding Source Amount James Mauldin $0 3-5447 Resolution # Additional Information Additional Attachments: N BE IT RESOLVED BY THE DALLAS FORT WORTH INTERNATIONAL AIRPORT BOARD That the Chief Executive Officer or designee be authorized to enter into an Asset Management Agreement with BlackRock, Inc. for their Direct Lending Fund IX, in a commitment amount of $7.5 million. Approved as to Form by Approved as to Funding by Approved as to M/WBE by Rodriguez, Elaine Underwood, Max Burks Lee, Tamela Legal Counsel Vice President Finance Vice President Business Diversity Aug 19, 2020 10:31 am Finance and Development Aug 19, 2020 7:31 am Business Diversity and Development Aug 19, 2020 4:24 pm SIGNATURE REQUIRED FOR APPROVAL Approved by Department Head Pending Aug 18, 2020 9:13 am Chief Executive Officer Date DALLAS FORT WORTH INTERNATIONAL AIRPORT BOARD OFFICIAL BOARD ACTION/RESOLUTION Date Committee Subject Resolution # 09/03/2020 Retirement Approve an Asset Management Agreement with Patron Capital & Investments Action That the Chief Executive Officer or designee be authorized to enter into an Asset Management Agreement with Patron Capital for their Patron Capital Fund VI, in a commitment amount of 6 million Euro (approximately $7 million). Description • Patron Capital Partners was established in 1999 by Keith Breslauer to make value-oriented and opportunistic real estate and real estate-related investments in Western Europe. Beginning in 2000 with its first fund, Patron has invested in 81 assets across 16 European countries representing 2.89 billion Euro of equity. • The goal of Fund VI is to continue the successful strategy of its predecessor funds by focusing on selective opportunistic and value-oriented investments, primarily challenged assets such as distressed and/or undervalued property and property-related assets, loans, and corporate entities. It will aim to invest in non-competitive situations, originated through Patron's extensive network of long-standing relationships with local partners, financial institutions, investment banks, private equity partners, local advisers and agents. It is expected to return a net 14% IRR and net 1.5x equity multiple. • This investment represents the opportunity to further diversify the the Airport's pension real estate allocation into geographies
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