News & Analysis

OCERS outlines its private credit pacing plan

The US public pension plans to commit $200m to private debt vehicles in 2022.

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Institution: Orange County Employees Retirement System
Headquarters: Santa Ana, US
AUM: $21.5 billion
Allocation to private debt: 2.2%

Orange County Employees Retirement System approved its private credit pacing plan of $200 million to $300 million per year on a three-year basis at its October 2021 investment committee meeting, a contact at the pension informed Private Debt Investor.

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Highlights from OCERS’ October 2021 investment committee meeting:

  • As of 30 June 2021, the market value of OCERS’ private credit portfolio was $482.6 million, which accounted for 2.2 percent of its investment portfolio. The pension’s private credit target allocation is 2.5 percent.
  • OCERS recently committed $75 million to Crayhill Principal Strategies Fund II, which represents its only commitment to a private debt fund in 2021 to date.
  • The recommendation, put forth by its investment consultant Meketa Investment Group, calls for the pension to target $200 million in commitments on a rolling three-year average in 2022. The annual commitments will then increase to $250 million and remain at that level until 2027, after which it will increase to $330 million.
  • For each year, OCERS plans to commit to three to five partnerships that will provide diversification across investment opportunities. Its legacy commitments have been heavily focused on mid-market direct lending.
  • The pension’s long-term allocation to private credit will continue to focus on diversifying yield-oriented strategies.

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