The Teacher Retirement System of Texas recently committed a total of $200 million to two investment vehicles managed by distressed debt specialist Oaktree Capital Management, marking the limited partner’s first private equity pledges of the year, a spokesperson told Buyouts.
The amount will be evenly divided between Oaktree Opportunities Fund VIII LP and its sidecar vehicle Oaktree Opportunities Fund VIIIb LP, which will either be invested at the same time as the main vehicle, or after it, depending on the opportunities available.
Oaktree Capital has earmarked the funds for investing around the world in the distressed debt of large, overleveraged companies. Through the funds the firm frequently takes a leadership role in the restructuring processes of the companies it invests in, but often refrains from taking an equity or control position in the reorganized businesses.
The Teachers’ Retirement System of the State of Illinois also recently pledged to the two Oaktree funds, with $100 million going to Oaktree Opportunities Fund VIII and a $50 million to Oaktree Opportunities Fund VIIIb.
Last fall, Buyouts learned that the Teacher Retirement System of Texas intended to commit roughly $2.5 billion to private equity in 2010. It has an appetite for primary funds, secondary funds, as well as co-investments. The $91 billion pension fund’s target allocation to private equity is 10 percent, with a range of 5 percent to 15 percent. As of Sept. 30, the actual private equity allocation stood at 6.5 percent.