Ohio Police and Fire Pension Fund has approved up to $30 million to the distressed debt fund of Glendon Capital Management, the pension said in an investment note on Thursday.
The board agreed to allocate the funds to Glendon Opportunities Fund II, which focuses on distressed debt financings in North America and Europe, during its meeting last week. The fundraising target and terms of the fund were not disclosed. Glendon, a Santa Monica, California-based manager that spun out of Barclays Capital in 2013, launched the fund this year.
Glendon declined to comment, while OPF did not respond to request for comment.
OPF previously committed $30 million to Glendon’s predecessor fund, which was launched in 2014 and held a final close on its $1 billion fundraising target, Private Debt Investor data shows.
On top of distressed debt, OPF is also an active investor in senior and mezzanine strategies, providing a $75 million direct lending mandate to New York-based Owl Rock Capital this April, as PDI previously reported.
The Glendon commitment came from the pension plan’s private markets bucket, which accounts for 6.2 percent of its $15.08 billion portfolio as of 30 April.
As of that date, OPF’s private markets allocation – which includes venture debt, private equity and growth equity – was slightly below its 8 percent long-term target. Earlier this year the board approved a plan to commit $175 million for its private markets portfolio through January 2018.
OPF's private markets portfolio achieved one of its two return benchmarks last year, according to its 2017 annual report.
Total returns outperformed a public market equivalent on the Wilshire 5000 index by 1.6 percent, and the pension expects its portfolio to outperform this benchmark again in 2017. However, the private markets programme did not achieve its second benchmark – a total return surpassing a public market equivalent on the Wilshire 5000 plus 300 basis points.