On the go: The Border to Coast Pension Partnership, which handles the assets of 11 Local Government Pension Schemes worth a total of around £46bn, has made commitments of more than £575m to six private credit funds.
The six investments are the first private credit commitments BCPP has made as part of the £3bn private markets programme it launched in 2019, which already includes private equity and infrastructure allocations.
Noting that BCPP had been able to generate “meaningful fee savings as a result of its scale and early engagement”, Mark Lyon, head of internal management, said: “Private credit is a key asset class for our partner funds as they seek attractive investment opportunities, income and diversification of risk.”
The six investments provide BCPP with exposure to several targeted themes within private credit, including a focus on senior debt, manager track record, and stressed and distressed companies.
Specifically, BCPP has committed $104m (£74.8m) to HPS Investment Partners’ HPS Mezzanine Partners 2019, a global mezzanine strategy with a focus on North America and Europe.
Similarly, $125m has been allocated to GSO Capital Opportunities IV, also a global mezzanine strategy with a focus on North America and Europe but which includes a commitment to a co-investment sidecar vehicle that serves to reduce the overall fee burden for BCPP’s partner funds.
The pension pool has allocated $115m to Ares Management’s Ares Capital Europe V, and £95m to Baring Asset Management’s Baring Europe III. Both commitments are European direct lending strategies focused on mid-market companies.
Fortress Investment Group has received $100m for investment in its Fortress Capital Opportunities V, a specialist credit fund focused on opportunistic investments with stressed and distressed companies in North America and Europe.
“The manager is expected to benefit from current uncertain market conditions but has also demonstrated an ability to deploy capital in a more benign environment,” BCPP noted.
Finally, $160m has been allocated to Churchill Asset Management’s Churchill Middle Market Senior IV, a North American direct lending strategy focused on mid-market companies.
The managers were selected by BCPP’s internal portfolio management team with support from several service providers using a “robust and responsible investment process focusing on investment and operational due diligence”, the fund noted.
Those providers include investment consultant Albourne, which recently launched an environmental, social and governance framework for alternatives (including private credit), as previously reported.
This article originally appeared on Mandatewire.com
