SamCERA debt returns surpass benchmark

Fixed income accounts for 18.5% of the pension plan’s $3.96bn portfolio, below its 21% target.

San Mateo County Employees' Retirement Association’s allocation to fixed income – which includes the pension’s commitments to direct lending and credit vehicles – surpassed its return benchmarks early this year.

These commitments delivered 2.15 percent returns, above the pension plan’s return benchmark of 1.67 percent for the three months ending 30 April, according to agenda materials for its board meeting last week.

Returns for the one-year and three-year periods ending that same date, at 3.24 percent and 3.96 percent, respectively, also surpassed their respective benchmarks of 1.09 percent and 2.8 percent, the documents showed.

By comparison, the pension plan’s total fund generated a three-month net return of 4.32 percent, a 12-month return of 6.1 percent, and a three-year return of 6.18 percent as of April 30.

While it has turned out strong returns this year and the previous three years, the pension plan’s fixed income allocation was slightly underweight as of 30 April. SamCERA’s fixed income allocation of 18.5 percent, or $733.43 million of its $3.96 billion portfolio, was below its 21 percent target.

Commitments to credit fund strategies within this asset allocation include Angelo Gordon’s Opportunistic Whole Loan Fund ($15.17 million), Brigade Capital Opportunistic ($72.99 million), Beach Point Select Fund ($45.87 million), and the TCP Direct Lending Fund VIII ($8.44 million), the agenda showed.

The Northern California pension plan also committed $10 million to the Taurus Mining Finance fund direct lending vehicle, which is categorised under the pension’s private real assets allocation, in December.

SamCERA was not immediately available to comment.