Ohio Police and Fire carves out private debt bucket

The pension also approved a $50m commitment to CapitalSpring Investment Partners V.

The Ohio Police and Fire Pension Fund board of trustees adopted a new private debt asset allocation at its June meeting, the pension plan said on Wednesday.

The pension plan will now shift its current direct lending and other private debt commitments in its portfolio, which were previously categorised under the high yield umbrella, into a distinct private credit group with a 5 percent allocation target, according to an OPF investment note.

The new bucket comes as the pension agreed to adopt several new exposure targets for its other asset classes. Among the changes, the high yield allocation target decreased from 15 percent to 7 percent. Core fixed income target increased from 20 percent to 23 percent, while the real assets allocation target increased from 5 percent to 8 percent. 

“Staff and consultants will be developing plans on reaching the new targets,” the investment note read. “No terminations or new searches are currently scheduled.”

OP&F’s investment portfolio was valued at just over $15.1 billion as of Tuesday.

Also during its 28 June meeting, the OPF board approved a $50 million committment to CapitalSpring Investment Partners V, a direct lending manager who specialises in lending to restaurant franchises. The vehicle has a $500 million fundraising target and has already garnered $371.1 million in capital commitments, PDI data showed.

The CapitalSpring commitment marks the sixth direct lending manager in the Ohio pension plan’s portfolio. The other five direct lending mandates include investments in Owl Rock Capital, GSO European Senior Debt Fund, KKR Lending Partners II, MC Credit Partners and Tennenbaum Enhanced Yield Fund I.

The pension plan's high yield allocation – which previously included the five direct lending mandates – was slightly underweight as of 30 April, according to its latest monthly investment data. High yield accounted for 14.6 percent of its total portfolio, just below its 15 percent long term benchmark.

OP&F also invests in distressed debt strategies, having approved up to $30 million to the distressed debt fund of Glendon Capital Management at its May meeting.

CapitalSpring was not immediately available to comment.