Oklahoma Tobacco Settlement Endowment launches direct lending search

Oklahoma Tobacco Settlement Endowment Trust, Oklahoma City, is searching for U.S. direct lending managers to run $30 million to $50 million total.

Lisa Murray, chief investment officer at the Oklahoma state treasurer's office, which oversees the roughly $1 billion trust, previously told Pensions & Investments that the trust is searching for one or two direct lending managers.

Alcentra was selected in the summer for a $25 million commitment to its Clareant European Direct Lending Fund II, but was not ultimately hired because of “contract issues and the quick hard closing date,” Ms. Murray said. Alcentra would have been the trust's first European direct lending manager. Alcentra officials could not immediately be reached for comment.

Instead, investment consultant NEPC recommended that the trust search for U.S. direct lending managers. The trust already has $32 million invested with U.S. direct lending manager Medley Capital, which is invited to bid. Funding is expected to come from rebalancing of the trust’s dynamic fixed-income portfolio with no terminations.

Separate account and comingled structures will be considered. The selected manager or managers cannot purchase securities directly from a tobacco company, according to the RFP. This does not apply to underlying holdings of comingled funds.

The RFP is available on NEPC’s website.

Proposals are due by 4:30 p.m. PDT on May 1. Finalist interviews are anticipated for the June 21 meeting with a hiring decision that day or shortly after.