A number of US pension funds are increasing their allocations to private credit as the sector continues to attract the attention of institutional investors around the world.

Earlier this month, the Employees Retirement System of Texas agreed to increase its allocations to asset-backed, direct lending and distressed strategies. During a 21 August board meeting, the $39.1bn (£29.75bn) pension fund decided to invest between $1bn and $1.8bn into private capital markets during the 2025 financial year.

Regarding its private credit strategy, the board said tat it would “continue to pursue an opportunistic approach” by making “one to two new primary fund commitments for the year”.

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The board added that some areas within structured credit appear attractive, and staff expects to maintain a similar pacing for the 2026 and 2027 financial years.

Meanwhile on 26 August, the $27bn Teachers Retirement System of Louisiana (TRSL) approved a substantial increase in its private credit allocations, up to the value of $1.3bn.

Between $600m and $800m of this will be invested in distressed/subordinated debt, while $200m to $400m has been earmarked for direct lending investments.

Last year, the retirement fund allocated $400m towards private credit.

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In March, the TRSL allocated $100m to Comvest Credit Partners VII, and $125m to the Castlelake Asset-Based Private Credit III fund.

It was recently revealed that the Fire and Police Pension Association of Colorado made two new private debt commitments totalling $30m in June of this year, in the latest example of US pension funds choosing private debt.

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