Merced County (Calif.) Employees' Retirement Association made two new commitments totaling up to $28 million, said Kristen Santos, retirement administrator.
The $1.2 billion pension fund's board at its Dec. 9 meeting approved commitments of up to $20 million to Varagon Capital Direct Lending Fund I, a middle-market direct lending fund managed by Varagon Capital Partners, and up to $8 million to Carnelian Energy Capital IV, a natural resources fund focused on North American energy investments managed by Carnelian Energy Capital Management.
The Varagon Capital commitment falls within MercedCERA's new 5% target allocation to direct lending. The board approved the new target at its Oct. 28 meeting, also approving an increase to the target allocation to equities to 41% from 39% and dropping the fixed-income target to 11% from 18%.
As of Sept. 30, the pension fund's actual allocation to real assets was 5.1%; the target is 5%.