Chicago Teachers’ Pension Fund to make first private credit allocation
The Chicago Teachers’ Pension Fund (CTPF) is preparing to make its first allocation to the private credit market, and is now welcoming bids from investment managers.
The pension fund plans to make an initial investment of up to $350m (£238m) in the sector, which will be split between multiple private credit investment managers.
All bids should be received before 19 January 2024, according to a document on the fund’s website.
The CTPF is Illinois’ oldest public retirement system, and represents more than 94,000 members with assets of just over $12bn.
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Fernando Vinzons, chief investment officer for the CTPF, said that any future allocation to the private credit market will represent about three per cent of the fund’s total assets.
“This is the first time that the CTPF will meaningfully invest in private credit,” Vinzons said.
The decision to enter the private credit space came after the board of trustees voted to adopt a new strategic asset allocation for the fund.
The fund trimmed its equities holdings outside the US in the second quarter of this year, in order to make space for the new private credit allocations.
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According to Callan, the fund’s investment consultant that will evaluate bids from potential private credit managers, the pension fund will only entertain bids from investment managers which have a minimum fund size of $500m.
The fund is also looking for managers with a so-called evergreen or draw-down structure. It will not consider secondaries strategies, trigger funds or niche products such as fossil fuels, life settlements or real estate.
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