SURS hires debut private credit advisor

The US public pension has introduced a specific private credit offering to its portfolio.

Institution: State Universities Retirement System of Illinois
Headquarters: Champaign, US
AUM: $20.45 billion
Allocation to alternatives: 14.4%

State Universities Retirement System of Illinois has hired Meketa as the first investment consultant for its newly formed private credit sub-asset class, according to a press release on the pension’s website.

An initial RFP for a private credit advisor was issued by SURS in June 2020. Procurement criteria included requiring prospective consultants to provide assistance with portfolio construction, pacing and evaluation; as well as providing assistance with the securing of direct private credit fund commitments.

Private credit will be within the pension’s wider credit fixed income portfolio, which comprised 14 percent of SURS’ $17.79 billion total assets under management as of 31 March 2020.

The target allocation for private credit has been set at 5 percent, with emerging market debt and progress credit the other sub-asset classes sitting alongside private credit within the credit fixed income portfolio. SURS’ AUM as of 31 August 2020 was $20.45 billion, meaning that the pension’s maximum private credit allocation could total $1.02 billion.

As illustrated below, SURS has exposure to private credit through previous real estate debt commitments made to Dune Real Estate Partners through funds III and IV of its flagship series.

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