By David G. Barry
The Teachers’ Retirement System of Louisiana (TRSL) is
adding three credit funds, a real estate fund and a private equity fund to its
portfolio.
The $24.3 billion pension fund got the OK at its October board meeting to
invest up to $325 million in the five funds.
The largest allocation was $125 million to ICG North America Credit Partners
III, L.P. Also on the credit side, TRSL committed up to $25 million to both
OHA Strategic Credit Fund III, L.P. and HPS Strategic Investment
Partners V, L.P.
Oak Hill Advisors’ OHA Strategic Credit is a global distressed debt
fund. According to information given to TRSL earlier this year, the fund has a
$3 billion target. At its September meeting, TRSL committed $150 million to two
other distress funds. One of those was another HPS fund, HPS Special
Situations Opportunity Fund II, L.P., in which it invested $125 million. It
also deployed $25 million in Ares Special Opportunities Fund II, L.P.
According to published reports, HPS is seeking to raise $9.5 billion for
HPS Strategic Investment Partners V. The fund invests in junior debt in North
American and European companies.
Also at the October meeting, TRSL committed up to $75 million to both FCP
Realty Fund VI, L.P. and to a private equity fund from J.F. Lehman, JFL
Equity Investors VI, L.P.
FCP, which focuses on multifamily and commercial property opportunities in the
United States, closed its fifth fund a year ago at $1.188 billion.
As of June 30, alternative assets – including private equity and credit – and
real estate accounted for nearly a half of its portfolio at 48.9%.
The system is in the midst of an aggressive effort to add to its portfolio
during the 2022-23 fiscal year, targeting $2.9 billion to $3.9 billion. Since
July 1, the board has approved $925 million in commitments.
TRSL generated a negative 7.7% return for the fiscal year ended June 30,
beating its benchmark of negative 11%.
