Kentucky Teachers commits $390 million total to 6 managers

Kentucky Teachers' Retirement System, Frankfort, committed a total of $390 million to six managers, confirmed Gary Harbin, executive secretary.

The $16.6 billion pension fund committed $150 million to Golub Capital Pearls Direct Lending Program; $100 million to IFM Global Infrastructure, managed by Industry Funds Management; and $50 million each to Oaktree European Dislocation Fund, a middle market lending fund managed by Oaktree Capital Management (OAK), and AG Net Lease Realty Fund III, a triple-net lease fund managed by Angelo, Gordon & Co.

The system also committed $35 million to Landmark Equity Partners XV, a secondary private equity fund managed by Landmark Partners. The commitment includes $5 million from the $400 million Medical Insurance Plan, which funds retiree health benefits. The medical plan also committed $5 million to Fort Washington Private Equity Opportunities Fund III, a small- to middle-market venture capital fund managed by Fort Washington Investment Advisors.

Separately, the investment committee approved several changes to the pension plan's target asset allocation. Domestic large-cap equity was reduced to 39% from 40%, and fixed income, to 19% from 21%. Increased allocations were: international equity, to 18% from 17%; real estate, to 5% from 4%; and “additional categories,” including direct lending, non-U.S. fixed income, opportunistic credit and bank loans to 7% from 6%. The rest of the asset classes will remain the same – 5% alternatives, 3% domestic midcap equity and 2% each domestic small-cap equity and cash.

Also, the pension fund returned 6% for the first quarter, outperforming the custom benchmark return of 5.7%.