San Mateo County invests with Tennenbaum

The $35m commitment is part of the fund’s opportunistic credit strategy.

The San Mateo County Employees Retirement Association (SamCERA) has approved a $35 million investment in a Tennenbaum Capital Partners direct lending fund, boosting the pension fund’s investments in riskier securities. 

The Redwood City, California-based SamCERA endorsed the commitment to the Tennenbaum Capital Partners Direct Lending Fund VIII at its 7 June meeting. Its last investment was a $25 million commitment to CIM Infrastructure Fund II, which came at the pension fund’s 15 December meeting.

The Tennenbaum commitment is part of pension fund’s opportunistic credit strategy—the highest risk segment of its fixed income investments that includes putting money into bank loans, high-yield bonds, convertible bonds, CMBS and ABS.

According to its 2015 fiscal year (ending 30 June 2015) annual report, SamCERA had 19.3 percent of its assets in fixed-income investments. Other bond investments are with Angelo, Gordon & Co, Beach Point Capital Management and Brigade Capital Management. The Tennenbaum commitment appears to be SamCERA’s only current investment with the Santa Monica, California-based credit firm.

The SamCERA commitment comes after the Iowa Public Employees Retirement System backed a
combined $400 million
investment in direct lending for Tennenbaum and Monroe Capital. The division between the two firms was not disclosed.

Tennenbaum Capital handles direct lending and special situations funds, as well as a publicly traded BDC, the Tennenbaum Capital Partners Corp (TCPC). The firm has about $6 billion under management and recently garnered a $250 million investment from insurer CNO Financial. The Santa Monica-based manager is planning to expand its product set with the new CNO backing.