Austin City ERS Planning $140M to Private Credit in 2024, 2025

The Austin City Employees’ Retirement System reviewed their private credit strategic plan with consultant Callan during the February 22nd Investment Committee meeting. 

The private credit strategic plan includes a target allocation of 10% with a range of +/-3%. To meet this target they plan to make annual commitments of $140 million through 2026, and annual commitments of $40 million from 2027-2028. 

Furthermore, they expect to invest in opportunistic and direct lending strategies in the initial two years. 

Within the private credit exposure, their target commitments by sector are 35% to direct lending, 20% to distressed debt, 20% to asset backed debt, 15% to mezzanine/bridge financing, and 10% to credit special situations.   

The recommendation to begin incorporating private credit into the portfolio was given in the September 21, 2023 board meeting which led to the first private credit commitment of $90 million to Blue Owl Diversified Lending Fund being approved at the December board meeting.

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