Stanislaus County plots alts searches

The California pension fund is doubling its exposure to private credit and establishing new allocations to private equity and value-add real estate. The retirement fund plans to conduct searches next year.  

The Stanislaus County Employees Retirement Association (StanCERA) plans to kick off searches for private credit, private equity and real estate next year, as a result of a new asset allocation policy the pension recently adopted.

The $1.8 billion pension plan, which almost doubled its target to private credit from 7.5 percent to 14 percent, will launch a search for private credit managers in January. Finalists for the private credit mandate will be interviewed at a February meeting.

The private equity and value-add real estate searches will be started in February, with finalist presentations to be made in March. The new asset allocation calls for a new 5 percent target each to private equity and value-add real estate (about $90 million per brief).

Verus, the pension fund’s Seattle-based investment consultant, will assist with the searches. Verus also recommended the new asset allocation mix at a May board meeting, saying that it offers the best long-term risk/reward option for StanCERA. Other changes to the policy involved establishing a 3 percent allocation to US Treasuries and an 18 percent target to short-term government credit. US large-cap public equities will be dropped to 12 percent from 30.5 percent.

Stanislaus County’s existing private credit investments include two asset-based lending funds managed by Raven Capital Management, as well as Medley Management’s Opportunity Fund II, according to PDI Research & Analytics.