LPs

CalPERS bets on credit with Sankaty, CVC

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  • Commitment of $500 mln to Sankaty
  • Also $250 mln to a CVC credit fund
  • CalPERS has a 10.4 allocation to PE

CalPERS committed $500 million to what appears to be a separate account managed by Sankaty Advisors, called Sankaty Managed Account (CalPERS) Investors LP, in addition to $250 million for CVC Credit Strategic Investment A LP.

Sankaty, which is Bain Capital’s credit affiliate, invests in leveraged loans, high-yield bonds, distressed debt, private lending, structured products, non-performing loans and equities in North America, Europe, Australia and New Zealand. The firm manages roughly $7.9 billion through its strategic relationships strategy, which allows limited partners to create customized accounts that can invest across different geographies and strategies.

Sankaty also manages open- and closed-ended commingled funds, CLOs and separate accounts through its other strategic platforms. A CalPERS spokesman declined to provide any additional information about the July commitments.

The $300.7 billion retirement system previously set up a separate account managed by The Blackstone Group’s Tactical Opportunities business. CalPERS increased its commitment to the Blackstone account by $300 million in January, bringing its total commitment to $800 million.

CVC Capital Partners’ $11.8 billion private debt arm, known as CVC Credit Partners, primarily invests in senior secured debt instruments issued by private equity-backed companies, according to the firm’s website. CVC Credit Partners offers global and European opportunities vehicles, structured credit vehicles and separately managed accounts.

CalPERS is a longtime LP in CVC’s European Equity Partners funds, having committed to six of the firm’s vehicles going back to its 1996 vintage, according to the retirement system’s website.

A CVC spokesman was not immediately available.

CalPERS had a 10.4 percent allocation to private equity as of July 31, according to meeting materials. The retirement system is slightly above its 10 percent interim strategic target for the asset class.

In August, CalPERS disclosed more than $1 billion in private equity commitments. Those commitments, which occurred in May and June, included allocations to funds managed by First Reserve, Lindsay Goldberg, Tailwind Capital and Patria Investimentos, a Brazilian firm backed by Blackstone.