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Francisco Partners co-investment gives Ohio Schools equity in Zocdoc

The $17bn pension created its private debt allocation last year.

School Employees Retirement System of Ohio is steadily growing its private credit allocation, highlighted by a co-investment alongside Francisco Partners in healthcare company Zocdoc.

Ohio Schools invested $8 million in the company, according to an online summary of its board’s May meeting. In February, Zocdoc, a digital healthcare marketplace and scheduling tool, announced it had received $150 million in growth financing from Francisco Partners. Ohio Schools spokesman Tim Barbour confirmed to Buyouts that the pension’s investment was part of this total.

Ohio Schools will also get an equity grant in Zocdoc as part of the investment, Barbour said.

Francisco’s financing was a “structured investment,” combining both debt and equity, Zocdoc spokeswoman Sandra Glading told Buyouts via email.

Glading added that the company raised $220 million in equity in addition to the $150 million growth financing from Francisco Partners.

Francisco Partners did not respond to a request for comment.

Zocdoc started out as a scheduling tool for in-person doctor appointments, but during the pandemic it transitioned into tele-health. It also created a vaccine scheduler to help cities, states and other healthcare providers provide vaccinations, according to a press release.

Ohio Schools launched its private credit allocation last year, as Buyouts reported, and hired Nationwide and Morgan Stanley veteran Adam Messerschmitt to run it.

At a yearly review of the program in April, staff reported the portfolio had returned 7.8 percent net of fees since inception, beating its policy benchmark.

As of March 31, the private credit allocation took up 1.8 percent of assets against a 3 percent target. Its portfolio was valued at $312.7 million. The total fund value was just under $17 million.

The pension wants to grow the private credit allocation to 3 percent by the end of fiscal year 2021, and to 5 percent by the end of fiscal year 2022.

The private debt portfolio contains several strategies. Direct lending is the largest, with an 80 percent target allocation, while distressed lending targets 10 percent and structured credit 10 percent. Mezzanine is also in the portfolio but has no target. The Zocdoc investment was part of the direct lending strategy.

That was not the only credit investment Ohio Schools announced in May. It also committed $200 million to Apollo Origination Partners, managed by Apollo Global Management, and $150 million to a European private debt fund from Barings.

Other private investments included $75 million to Monomoy Capital Partners IV. This fund focuses on mid-market buyouts and is targeting $1 billion, as Buyouts reported. It also committed $75 million to Strategic Value Special Situations Fund V, a special situations fund targeting $4 billion, as Buyouts reported.

Action Item: read the report out from Ohio Schools’ May meeting here.