The Chicago Teachers’ Pension Fund (CTPF), the oldest public retirement scheme in Illinois, is planning to makes its first foray into the booming private credit market with an initial allocation of up to $350m, according to a report by Bloomberg.
The report cites a document on the pensions fund’s website as revealing that it has issued a request for proposals to split the allocation among multiple private credit investment managers, with 19 January the deadline for bids.
Chicago Teachers’ is the latest pension to join those flocking to the $1.6 trillion private credit market as a slowdown in mergers and acquisitions stifle growth in private equity. Public pensions are attracted to the market’s outperformance and regular cash distributions that can come in handy for benefit payments.
In an emailed statement sent to to Bloomberg, Fernando Vinzons, Chief Investment Officer for the Chicago Teachers’ Pension Fund, said that the decision to allocate to private credit has been prompted by changing expectation for returns on the back of higher interest rates.
“This is the first time that the CTPF will meaningfully invest in private credit,” Vinzons said.