By Mario Marroquin
The private markets committee of the Washington State Investment Board approved a $250 million commitment to an open-ended fund managed by Oaktree Capital Management this week.
The committee voted to approve the investment in Oaktree’s Transportation Infrastructure Capital Partners, L.P. fund as part of the retirement system’s allocation to tangible assets which comprised 6.1% or approximately $9.2 billion at the end of the second quarter.
Oaktree Capital Managing Director and co-Portfolio Manager Emmett McCann explained the fund will target an 11% to 15% gross and 8% to 12% net internal rate of return by investing in North American transportation infrastructure and leveraging Oaktree’s extensive manager experience in the sector.
The state investment board, which held $182.3 billion assets under management at the end of June, reported a 5.4% return at the end of the 2022 fiscal year. Markets Group reported last month the retirement system’s 11% return in tangible assets, and respective 40.8% and 20% returns in real estate and private equity, buoyed the fund past its benchmark, which was an 0.8% loss at the end of the fiscal year.
SWIB was also reported to have approved a follow-on commitment of up to US$250 million to Arable Capital Partners as part of its tangible assets strategy in September.
According to a quarterly report by WSIB, which invests on behalf of 38 funds, allocations to fixed income and public equity have been decreased while allocations to real estate and private equity have been increased to 21% and 29.3% respectively since June 2020.