Chicago Teachers’ approves $400m credit portfolio structure
The Chicago Teachers’ Pension Fund (CTPF) approved the new structure of its private credit portfolio in its last meeting, which will see it allocate up to $400m (£318m) into the asset class.
The board decided that the fund will invest 36 per cent into direct lending, divided into large market and small-mid market strategies at 16 per cent and 20 per cent, respectively. It will put 31 per cent of the portfolio into specialty finance, 25 per cent into opportunistic and eight per cent into niche opportunities or fund of funds.
Read more: Chicago Teachers’ Pension Fund to make first private credit allocation
The board selected Jefferies Credit Partners, Oak Hill Advisors and Turning Rock Partners to run its direct lending mandate. While CFI Partners and Silver Rock will run the opportunistic mandate. The specialty finance portion will be managed by 400CM. The board said additional managers could be added to the strategy in the future.
Advisors at investment consulting firm Callan presented two portfolio options to the board, with an expected return of between eight to 10 per cent and an expected yield of seven to nine per cent. The option that the board selected has one less specialty finance manager.
According to Callan’s presentation the private credit portfolio is expected to feature both closed-end drawdown funds and evergreen strategies, with the bulk of the capital forecast to be committed over the first two years of the programme.
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