Glasgow pension fund places £40m with Pemberton

Pemberton is expected to reach a second close on its UK mid-market lending fund in the summer and is eyeing a final close of £500m.

Scotland-headquartered Strathclyde Pension Fund has allocated £40 million ($49 million; €46 million) to Pemberton’s UK-focused mid-market lending fund.

The fund is aiming to reach a final close of £500 million and held a first close in November. A second close is expected to take place in the summer, according to the pension fund’s documents.

Explaining its decision to invest in the UK private debt space, the pension fund said that the mid-market “is a significant and resilient segment and a key driver of output and growth”.

And on Pemberton’s strategy, the fund said: “The investment proposal targets a well-researched market opportunity in direct lending and follows on an investment process that Pemberton has established in both the UK and other European economies.”

Pemberton is targeting a gross IRR of up to 8 percent in its senior debt investment strategy. The fund is aiming to complete between 20 and 25 corporate loans spread across a diverse number of industries.

The investment period of the fund is three years long and the majority of investments will be held for four or five years.

Representatives from both Strathclyde and Pemberton declined to comment further on the commitment.

Strathclyde has a history of investing in the illiquid credit space having committed to funds managed by Muzinich, Alcentra and Barings. The firm is aiming to increase its overall commitments to the asset class under its Short Term Enhanced Allocation to 15 percent of its total portfolio. The commitment to Pemberton raises that to 13.7 percent, the documents stated.