Chicago Metropolitan Water Reclamation District Retirement Fund approved committing a total of about $70 million to private credit funds managed by Brightwood Capital Advisors and Neuberger Berman.
The $1.4 billion pension fund's board approved committing $35 million each to Brightwood Capital Fund V and Neuberger Berman Private Debt Fund V at its July 26 meeting, said Brian Gillespie, investment officer, in an email.
The commitments are pending contract negotiations, Mr. Gillespie said. The pension fund issued an RFP in February because it was considering its first commitments to private credit in order to further diversify the portfolio. While the pension fund's investment policy does not currently have a target to private credit, Mr. Gillespie said the pension fund is looking to allocate 5% of its overall assets to asset class and funding will likely come from reductions in public equities and fixed income.
As of March 31, the pension fund's actual allocations to domestic equities, fixed income and international equities were 37.3%, 26.3% and 9.7%, respectively; their current respective targets are 38%, 27% and 20%.
Mr. Gillespie said the private credit RFP will remain active until contracts are finalized.
Investment consultant Marquette Associates assisted.