Kentucky pension seeking $250m debt mandate – exclusive

The pension heard a presentation on Benefit Street Partners’ Fund IV at its most recent investment committee meeting. 

Kentucky Retirement Systems will soon begin an invitation-only search for a private debt mandate, potentially totaling $250 million, the pension told Private Debt Investor.

Rich Robben, the interim chief investment officer and director of fixed income at KRS, said the search for a direct lender will commence “in the very near future”, but that the pension did not have an exact date.

The fund will likely consider nine to 10 firms and send out RFIs later this month, he added. The consulting firm RVK will be handling the process.

The first presentation related to the search has already taken place, according to Robben.

During its 22 March meeting, the pension’s investment committee heard a presentation on the fourth private debt fund from Benefit Street Partners, the lending arm of Providence Equity, which had $20.1 billion in assets under management as of 28 February 2017, according to the presentation.

Benefit Street Partners Debt Fund IV is currently in fundraising and targeting $1.75 billion.

The fund invests across the capital stack but focuses on senior secured debt. Other public pensions that have already committed to the fund include North Carolina State Treasury ($250 million) and State of Wisconsin Investment Board ($100 million), Private Debt Investor data shows. 

However, the investment committee did not approve an allocation to BSP IV at the March meeting, and the presentation was only an “educational piece”, Robben said.

Benefit Street Partners declined to comment.

The Kentucky pension’s fixed income strategy, which includes private credit, had a market value of $1.5 billion as of 31 January, according to a monthly portfolio performance report.

At a previous meeting this year, the committee approved a $75 million commitment to Levine Leichtman Capital Partners VI debt fund, minutes from that 7 February meeting show.