State of Wisconsin Investment Board may raise private equity/debt allocation

The State of Wisconsin Investment Board will vote on whether to increase its private equity and debt allocation from 8 percent to 9 percent, with the additional funding being directed from public equity investments.

The board discussed the proposal at its 9-10 October meeting and will vote on it in December.

SWIB currently represents more than 622,000 workers in Wisconsin retirement plans and pension funds and over $117 billion in assets. It is the ninth largest pension fund in the country, according to the retirement plan’s annual report.

Between 2009 and 2016, SWIB invested in 37 different debt funds, Private Debt Investor previously reported. Fifty-two percent of that investment focused on distressed debt, 36 percent on mezzanine and subordinated debt, 6 percent on senior debt and the remaining 6 percent was invested in “other” debt funds.

Last year, SWIB had over $507 million invested in private debt, with $12 million in new commitments to the asset class at the end of 2017 and $33 million in the first quarter of 2018.

SWIB has allocated 8.1 percent of its funds to debt so far this year. The board voted to increase its private debt allocation to 8 percent at a board meeting in 2015 and has hopes to expand to 10 percent by an undetermined date, according to SWIB documents.

The fund has invested over $8.5 billion so far in 2018.