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Alternatives

Texas County adds $100 million to Redwood fund

The $30 billion Texas County & District Retirement System made its first alternative investment commitment of 2019 with a $100 million top up to Redwood Opportunity Domestic Fund, a transaction report showed.

The initial commitment to the fund, managed by stressed and distressed debt specialist Redwood Capital Management, was $25 million in October.

Investment officers of the Austin-based pension funds have steadily increased the portfolio's exposure to strategic credit, committing a total of $1.35 billion over the past three years.

TCDRS' credit portfolio started slowly with a single commitment of $100 million in 2016, followed by a total of $250 million committed to two funds in 2017; a total of $1 billion was committed to eight funds in 2018.

The fund's strategic credit portfolio totaled $2.544 billion as of Sept. 30, a quarterly investment report showed.

Among the credit managers TCDRS has favored with ongoing commitments is Beach Point Capital Management, which received an initial commitment of $200 million in 2017 followed by two additional commitments of $50 million each in 2018. Beach Point Capital runs a customized separate account of opportunistic credit investments for TCDRS.

Arbour Lane Capital Management received a total of $300 million in commitments in 2018 with $150 million going to Arbour Lane Credit Opportunity Fund II and the balance earmarked for a customized separate account of opportunistic credit in increments of $100 million in August and $50 million in December.

Napier Park Global Capital also manages opportunistic credit investments in a customized separate account for the pension fund, with an initial commitment of $100 million in July followed by three additional commitments of $50 million in September, November and December.