Texas County & District Retirement System committed $675 million to direct lending last week – a larger amount than it did in 2015 and 2016 combined – after setting up two separate accounts focused on the strategy.
The $24.5 billion pension fund allocated $450 million to Angelo Gordon’s direct lending arm, Twin Brook Capital Partners, and an additional $225 million to Crescent Capital Group on May 22 and 26, respectively, according to CDRS’ website.
The account with Twin Brook, AG Direct Lending (TX), represents the retirement plan’s first investment with the Chicago-based mid-market lender. CDRS’ commitment is part of the $2.3 billion Twin Brook has raised for its second fund, an amount that includes the $1.5 billion raised for a commingled fund and more than $750 million in separate accounts.
The commitment to Crescent is its third such investment with the Los Angeles-based asset management firm. Last year, CDRS set aside $25 million as seed capital for the Crescent (TX) Direct Lending Fund, with the new $225 million commitment being added to that vehicle. The Austin, Texas-based pension fund also pledged $100 million to Crescent’s business development company, Crescent Capital BDC.
Crescent is also raising Crescent Direct Lending Fund II, for which it set a goal of $1 billion, as Private Debt Investor previously reported. The vehicle will also have unlevered and levered sleeves, which will aim to achieve net internal rates of return of 7-9 percent and 10-12 percent, according documents from the New Hampshire Retirement System.
CDRS has built out its direct lending portfolio at a rapid clip, having committed $1.68 billion to the strategy over the past three years.
In addition to the Twin Brook and Crescent commitments made this year, CDRS also set aside $450 million to a separate account with Benefit Street Partners in April and €75 million in February to Metric Capital Parters’ ??MCP Private Capital Fund III, which hit its €850 million hard-cap. CDRS committed to the direct lending strategies of Silver Point Capital and Blackstone, among other managers, in 2015 and 2016.