The board at the Ohio Police and Fire Pension Fund has approved a $75 million direct lending mandate to Owl Rock Capital, the pension said in an investment note.
The latest mandate marks OPF's fifth direct lending manager in its portfolio, which includes a combined total of $325 million committed, including the Owl Rock commitment. In addition to the New York-based business development company, OPF has committed to GSO European Senior Debt Fund, KKR Lending Partners, MC Credit Partners and Tennenbaum Enhanced Yield Fund, the note read. All five fall under the fund's high yield allocation.
The pension's private markets allocation – which includes venture debt and growth equity – was slightly underweight as of 31 March, according to its latest quarterly investment data. Private markets accounted for 6.3 percent of its total portfolio, less than its 8 percent long term benchmark.
Earlier this year the board approved a plan to commit $175 million for its private markets portfolio through January 2018, as Private Debt Investor reported .
OPF's private markets portfolio achieved one of its two return benchmarks last year, according to its 2017 annual report. Total return outperformed a public market equivalent on the Wilshire 5000 index by 1.6 percent. The pension fund expects this asset allocation to reach this return level again in 2017. However, the private markets program did not achieve its second benchmark-a total return surpassing a public market equivalent on the Wilshire 5000 plus 300 basis points. The return amounts were not disclosed.
OPF's investment portfolio was valued at slightly more than $15 billion as of 25 April.
Owl Rock's direct lending strategy focuses on originating loans to US mid-market companies, including senior and mezzanine, according to its website. The lender provides debt financings of $100 million to $500 million for growth, acquisition, or refinancing of companies with EBITDA between $10 million and $250 million.
Owl Rock declined to comment, while OPF and was not immediately available.