The North Carolina Investment Advisory Committee disclosed $480 million in commitments to credit strategies at its meeting earlier this week, according to materials released by the committee.
In December, North Carolina committed $150 million to Benefit Street Partners Capital Opportunity Fund, a Providence Equity Partners affiliate that is targeting debt investments in small to mid-sized companies, according to an US Securities and Exchange Commission filing.
In addition to Benefit Street, North Carolina also committed $200 million to Providence’s third debt fund, which is targeting between $500 million and $750 million for investments in the telecom, media and technology sectors. The fund may also invest in business services, consumer retail, financials, energy and healthcare.
North Carolina’s final $130 million credit commitment went to Claren Road Opportunities Partners, a long/short credit manager that belongs to The Carlyle Group’s Global Market Strategies platform.
The committee advises on the investment portfolio of $86 billion The North Carolina Retirement System, which boasted a credit portfolio valued at roughly $4 billion as of 31 December. The credit portfolio represents 4.75 percent of the system’s total investment allocation.
North Carolina’s credit holdings generated a 16.56 percent one-year return and a 10.73 percent three year return, well above the custom credit benchmarks of 5.32 percent and 2.60 percent respectively, according to meeting materials.
Distressed debt strategies account for 22.4 percent the retirement system’s credit portfolio. Hedge multi-strategy and funds of funds account for 39.9 percent. The credit allocation also includes investments in bank loans, structured credit and mezzanine.