The New York State Teachers Retirement System (NYSTRS) committed $400m (£315.55m) to private debt funds between October and December last year.
The pension fund allocated $300m to the OIC Credit Opportunities IV fund, while the remaining $100m was committed to the Peninsula VIII, according to publicly available documents.
The OIC fund focuses on senior secured, asset-based loans to midstream energy and energy transition companies, while the Peninsula fund primarily invests in subordinated and mezzanine debt in North America.
NYSTRS had previously invested in Peninsula’s predecessor – the Peninsula VII fund, which closed in 2020 with almost $364m raised.
By the end of 2023, seven per cent of NYSTRS’ $140bn investment portfolio was allocated towards private debt, representing $9.8bn in total.
The pension fund reduced its private equity holdings last year as a rebalancing measure, bringing the total portfolio exposure to private equity from 11.4 per cent to nine per cent by the end of December 2023.
Pension funds have been ramping up their exposure to private credit. Last month, it emerged that four of the largest pension funds in Canada have started to expand into the market.
And in the UK, the private credit space is expected to see greater investment from direct contribution (DC) pension schemes, thanks to Long-Term Asset Funds (LTAFs).
The LTAF is a Financial Conduct Authority (FCA)-approved structure which was opened up to professional and retail investors last year to encourage private investment into illiquid assets such as credit or real assets.