Kentucky Teachers’ Retirement System, Frankfort, committed $145 million total to two alternative funds, said Gary Harbin, executive secretary.
The $17.9 billion pension fund and the retirement system’s approximately $500 million medical insurance plan committed $75 million and $10 million, respectively, to Marathon European Credit Opportunities Fund III.
The European distressed debt fund is managed by Marathon Asset Management. The pension fund and medical insurance plan had previously committed to predecessor fund Marathon European Credit Opportunities Fund II.
Also, the pension fund and medical insurance plan committed $50 million and $10 million, respectively, to Oaktree European Capital Solutions Fund, a European opportunistic credit fund managed by Oaktree Capital Management.
The pension fund and medical insurance plan had previously committed to predecessor fund Oaktree European Dislocation Fund.
Separately, the pension fund returned 5.1% for the fiscal year ended June 30, exceeding its policy benchmark of 3.4% but falling short of its 7.5% assumed rate of return.
Among the top performers were non-core real estate, which returned 23%; timberland, 15.6%; and core real estate, 14.2%.
For the three-, five- and 10-year periods ended June 30, the pension fund returned an annualized 12.3%, 12% and 7%, respectively, exceeding its benchmarks in the three- and five-year periods. KTRS did not provide benchmark overall performance for the 10 years ended June 30.
The pension fund has a target asset allocation of 43% domestic equity; 19% international equity; 17% fixed income; 9% additional categories, which includes areas such as alternative credit and high-yield bonds; 5% each real estate and alternatives (private equity and timberland); and 2% cash.
