SURS introduces private credit to its portfolio offering

The US public pension is establishing a private credit asset class within its credit-focused fixed income portfolio.

Institution: State Universities Retirement System of Illinois
Headquarters: 
Champaign, United States
AUM:
 $21.91 billion
Allocation to alternatives: 
14.3%

State Universities Retirement System of Illinois confirmed the introduction of a standalone private credit asset class to its portfolio offering at its March 2021 board meeting, according to meeting minutes.


Highlights from SURS Illinois’ March 2021 board meeting:

  • Creation of private credit as its own asset class with a long-term target allocation of 5 percent. Introduction of this asset class comes at the expense of the pension reducing its target exposure to public credit.
  • $450 million-$550 million to be committed to the asset class annually, with individual commitments ranging from $50 million-$150 million.
  • Private credit commitments to diversify across strategy, collateral, vintage year, geography and manager.
  • A target of 20 percent of all new commitments will focus on emerging and MWDBE (minority, women and disadvantaged business enterprise) managers.

Historically, SURS’ only exposure to private credit has been via commitments to real estate debt funds, which remains an active strategy for the pension. SURS committed $100 million to real estate debt funds at its March 2021 meeting: Torchlight Debt Opportunity Fund VII and BIG Real Estate Fund II each received $50 million allocations.

SURS’ chief investment officer is Douglas Wesley, who has been in the role since March 2017. Previously, Wesley worked as the pension’s deputy CIO from November 2005 to February 2017.

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