SWIB sends $100m apiece to Centerbridge, GSO

The US state pension fund is investing in a distressed credit fund with Centerbridge Partners and a junior debt vehicle with Blackstone-owned GSO.  

The $102 billion State of Wisconsin Investment Board (SWIB) is investing in two credit funds, one each with Centerbridge Partners and GSO. According to a transaction report from SWIB’s August board meeting, the pension committed $100 million each to the GSO Capital Opportunities fund III and the Centerbridge Special Credit Partners III & III Flex funds.

The commitments came from SWIB’s private equity portfolio. The GSO fund is the Blackstone-owned firm’s third mezzanine vehicle, which is targeting $6 billion. It’s expected to close on its $6.5 billion hard-cap soon, after launching this winter. The last fund in this series finished fundraising on $4 billion in 2012.

Other known investors in GSO’s third mezz fund include the Teacher Retirement System of Texas, the Teacher Retirement System of Louisiana, the Indiana Public Retirement System and the Texas Municipal Retirement System, according to PDI data.

Centerbridge is raising $5 billion for its latest distressed pool of capital. The firm is putting $1.5 billion towards the Centerbridge Special Credit Fund III and $3.5 billion in the Centerbridge Special Credit Fund III Flex portion. The latter is a reserve pool meant to switch on at a later date when more distressed opportunities come to market. Centerbridge is not charging fees on commitments in the flex portion until that money is invested. The two sleeves are “stapled” to one another whereby LPs have to buy into both the main fund and the flex portion.

The other US pension funds invested in Centerbridge’s fund include the Oregon State Treasury, the Montana Board of Investments and the San Francisco Employees Retirement System, according to PDI research.