Texas state pension fund to commit up to $150m to private credit in 2024
The Employees Retirement System of Texas (ERS) is planning to commit $100m (£93.4m) to $150m to private credit this year, which is likely to be across one or two funds.
The $35.9bn pension fund for state employees is planning to commit between $900m to $1.5bn across private markets this year, including the private credit allocation.
At a joint meeting of the board of trustees and the investment advisory committee, Anthony Curtiss, deputy chief investment officer, noted that private credit is “opportunistic in nature”, with only one to two primary fund commitments per year.
Read more: NYSTRS committed $400m to private debt last year
David T. Veal, chief investment officer, noted that the fund life is typically shorter in private credit.
No commitments have been made into private credit yet for this year.
In contrast, nine investments have been made into private equity, totalling $339m, with the ERS targeting $450m to $750m for private equity this year.
Read more: $7.5bn Philadelphia pension fund to make first private debt allocations
One investment has been made into private real estate, totalling $50m, as part of a $150m to $450m tactical plan for 2024.
Private credit made up 3.8 per cent of the ERS investment trust’s return seeking assets as of December 2023, and returned one per cent during that month. The ERS is targeting returns of 5.6 per cent from private credit during 2024.
ERS plans to keep its total private markets allocation below 40 per cent, trending to 33.5 per cent by 2028.
Read more: Canadian pension funds expand into private credit