Rhode Island backs hedge fund Davidson Kempner

Rhode Island State Investment Commission at its July meeting committed to an opportunistic private credit fund from Davidson Kempner Capital Management.

The system invested up to $30 million to the hedge fund’s Long-Term Distressed Opportunities Fund V. The pool focuses on “distressed and growth opportunities across corporate debt and equity, real estate, structured credit and hard assets,” according to a pension investment memo.

Target fund size information for Davidson Kempner’s latest fund wasn’t available. The pool is targeting an internal rate of return in the “mid-teens,” according to meeting notes. Davidson Kempner IV closed at $1.75 billion in 2017, according to Institutional Investor.

Davidson Kempner’s first three distressed funds reached a net IRR of 15.5 percent as of Mar. 31, the memo showed. “The fund will target 20-35 investments across geographies but primarily in developed Europe and North America,” Thomas Lynch, a senior managing director at Cliffwater LLC, said in the memo.

Opportunistic private credit sat at a 1 percent allocation, on a 2 percent target, as of July, according to an asset allocation report.