Indiana Pension Approves Big Shift Into Private Credit

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The Indiana Public Retirement System approved a change in investment policy recently that will allow the fund to shift up to $1 billion into private credit, according to a Wall Street Journal report.

From the Wall Street Journal:

Board trustees approved an allocation shift that carves out 4% of the Indiana Public Retirement System’s defined benefit portfolio for private credit, the person said. Indiana previously only had exposure to private credit through an opportunistic debt portfolio, targeted to make up about 2% of its overall investment portfolio, and through which managers could deploy a portion of their mandates in illiquid debt, according to the person.

Indiana joins other investors that are creating dedicated allocations for private credit to bolster returns in a low-interest rate environment.

The pension fund’s fixed income team, headed by Director Allen Huang, will take the lead in the build-out of private credit, the person said. Indiana’s private equity investment staff, the pension fund’s investment consultant Verus and private equity adviser TorreyCove Capital Partners will help source investments.

[…]

Indiana’s expansion of its new private credit portfolio is expected to be a gradual process spanning years. The pension fund isn’t looking to push money into the market, especially in sub-sectors that are getting crowded, the person said. The pension fund will work on determining its pacing targets going forward.

Indiana PRS is one of several pension funds – including the Orange County Employees Retirement System – that have made similar allocation changes in recent months.

 

Photo credit: “Flag map of Indiana” by Map_of_USA_IN.svg. Licensed under CC BY-SA 3.0 via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Flag_map_of_Indiana.svg#mediaviewer/File:Flag_map_of_Indiana.svg

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