Texas Municipal Retirement System, Austin, invested a total of $865 million in two bank loan/collateralized debt obligation strategies.
During a March 22 meeting, the $28.4 billion pension fund's board approved hiring GSO Capital Partners to manage $440 million and Octagon Credit Investors for a $425 million investment from the fund's $4.6 billion non-core fixed-income portfolio, confirmed Bill Wallace, a spokesman for the Austin-based fund, in an email.
TMRS committed a $94 million in 2016 to GSO Capital Opportunities Fund III, a mezzanine debt fund. Octagon is a new manager for the fund.
Board meeting materials indicated that GSO and Octagon replace two existing non-core fixed-income managers, which were not named. Mr. Wallace did not respond to a request to name the managers that will be terminated.
The board also earmarked $210 million in commitments to five private equity and venture capital strategies during the meeting.
The pension fund committed $55 million to Providence Equity Partners VIII, a buyout fund focused on investments in media, communications, education and information services in North America and Western Europe.
TMRS also committed an additional $10 million to Providence Strategic Growth III, a lower-middle-market growth private equity fund that invests in North American technology company. In December, the fund committed $60 million to the fund. The pension fund committed $60 million to the second fund in the strategic growth series, which also is managed by Providence Equity Partners.
TPG received $50 million commitments each to two funds: TSSP Adjacent Opportunities Partners (D) and TPG Opportunities Partners IV. Both funds are co-investment vehicles seeking private equity investments opportunities in distressed and special situations.
The pension fund has previously committed or invested in various TPG funds.
Also, venture capital fund Foundry Group Next 2018 received a $45 million commitment. TMRS committed $35 million in 2016 to the first fund in the manager's series.