Illinois Teachers invests in debt funds with NXT, PIMCO

The Midwestern US pension fund has placed $250 million with private credit funds managed by Chicago-based lender NXT Capital and bond giant PIMCO.  

The $43.5 billion Illinois Teachers Retirement System made new commitments to two private debt funds at a board meeting last week. The pension fund’s board voted to invest $150 million in the NXT Senior Loan Fund IV and $100 million in the PIMCO Corporate Opportunities Fund II. Both firms manage money for the retirement plan already.

Chicago based mid-market lender NXT Capital began raising money for its fourth senior loan fund in September. The vehicle is aiming to raise about $300 million in equity commitments and use $500 million in bank leverage, as PDI previously reported. NXT’s Senior Loan Fund III raised a similar amount with the same leverage ratio in January. Illinois TRS has invested in NXT’s predecessor funds and currently has about $36 million with the firm, according to a statement from the pension fund.

The PIMCO corporate opportunities fund invests in private debt within a closed-end fund structure. Newport Beach, California-based PIMCO has about $1.5 trillion in assets under management, with the bulk of it in publicly traded bonds. The firm has been looking to grow in alternatives and equities. PIMCO handles $2.3 billion for Illinois TRS in other accounts.

The credit commitments are part of 15 made at the December meeting. TRS doled out $1.43 billion to a variety of traditional and alternative managers, both existing and new relationships.