Institution: San Jose Federated City Employees’ Retirement System
Headquarters: San Jose, US
AUM: $2.84 billion
Allocation to alternatives: 28.62%
San Jose Federated City Employees’ Retirement System has outlined its private markets pacing plan for fiscal year 2022-23, according to materials set to be confirmed in its upcoming investment committee meeting.
The California public pension has outlined $149 million for investment into private markets for FY 2022-23 – down from the $162 million pacing projection for FY 2021-22. The actual investment into private markets for FY 2021-22 will reach $167 million by 30 June.
Of this $149 million, $30 million is slated for private debt investment. San Jose FCERS has appetite for private debt investment in the corporate sector across North America.
Furthermore, San Jose FCERS has confirmed three commitments to private debt vehicles made across FY 2021-22: $9 million each to Angelo Gordon Credit Solutions Fund II, Arbour Lane Credit Opportunity Fund III and Octagon CLO Opportunity Fund IV.
Angelo Gordon, an investment and advisory firm focused on the alternatives market, launched CSF II in September 2021. Since launch, it has raised nearly $1.4 billion for the fund.
Arbour Lane Capital Management launched its third private debt vehicle in June 2021 and has attracted investment from a number of public pensions such as Texas County and District Retirement System and Teachers’ Retirement System of the State of Illinois. Arbour Lane specialises in opportunistic credit and special situation investments across the United States.
Octagon Credit Investors’ fourth CLO vehicle was launched with a $500 million target size in December 2021. It is a New York-based independent firm focused on providing credit solutions in North America.
San Jose Federated City Employees’ Retirement System currently allocates 2.7 percent of its investment portfolio to private debt, comprising $76.7 million in capital.
As illustrated below, the $2.84 billion public pension’s recent private debt commitments have tended to target vehicles with value-add or opportunistic strategies that invest in North America.
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