The San Bernardino County Employees’ Retirement System is set to allocate $500 million to its private equity programme – an allocation that embraces a range of private credit and private equity strategies.
The southern California pension fund laid out plans at a meeting last week to set aside $270 million for master custody accounts – mandates with specific managers to pursue an array of strategies – with the remaining $230 million unallocated, according to pension fund documents. It was not immediately clear whether the board had signed off on the plan.
An SBCERA representative could not be reached for comment.
Many of the existing MCAs lie in credit, which include direct lending, mezzanine debt and distressed debt. In June 2012, SBCERA awarded Gramercy an emerging markets mandate that included emerging market distressed, opportunistic and private credit along with high-yield and corporate debt and emerging markets equity, according to an investor document from Gramercy.
One credit MCA is with Ares Management, initially launched in 2013 after SBCERA awarded a series of mandates to the firm. The MCA was initially set up to include European direct lending, global structured credit, banking capital structure arbitrage and real estate debt, according to an investment memo at the time.
In addition, Tennenbaum Capital Partners won a mandate for performing credit and distressed debt in 2014 and Kayne Anderson Capital Advisors landed a commitment last year for its energy, credit, real estate and growth equity strategies. Partners Group also has an MCA spanning private equity, real estate, private debt and infrastructure dating back to at least 2013.
SBCERA projects a $625 million allocation to private equity and private debt strategies for 2020 and $650 million for 2021.