The San Bernardino Employees’ Retirement Association (SBCERA) approved a 2014 private equity plan at its meeting last week, a spokesperson confirmed to Private Debt Investor. The allocation includes up to $180 million to distressed and direct lending strategies.
The plan, as presented in documents made available to PDI, targets $300 million in private equity commitments for the year. Up to $50 million will go towards distressed strategies, with $75 million to $130 million dedicated to direct lending. Within those allocations, the $7.4 billion retirement association has earmarked $50 million for a separate accounts managed by Oaktree Capital Management and Ares Management that were approved last year. Another $70 million will go towards an unspecified European direct lending strategy managed by Ares.
The remainder will go towards international and domestic funds of funds, growth equity, secondaries and buyout strategies. The bulk of those strategies will also be invested in separate accounts, which SBCERA labels master custodial accounts.
“This diversified blend of partners should allow SBCERA to manage a well structured program with attractive pricing while focusing on the best opportunities as they occur,” wrote senior investment officer James Perry in his recommendation. ”Allocations will continue to be biased somewhat toward strategies with stronger early distribution characteristics as exemplified by direct lending.
Perry added that investment in the distressed sector will depend on market behavior at the time of Oaktree’s next flagship distressed fund.
SBCERA had a 16.4 percent allocation to private equity as of 30 September, according to its website.