February 14, 2018 / 4:12 PM / in 3 months

Tyne & Wear Pension Fund allocates 260 million pounds to private debt

(Reuters) - UK-based Tyne and Wear Pension Fund has chosen alternative investment managers Pemberton Capital Advisers and HPS Investment Partners to manage its 260 million pound commitment to private debt.

It is the first time that the 8.7 billion pound local government pension scheme has invested in private debt, which represents 3 percent of its total portfolio.

The fund reduced its commitment to UK equities to make the space for the latest allocation, according to its recent annual account.

Pemberton and HPS Investment Partners declined to comment.

Pemberton, which is backed by Legal & General, is in the process of raising a 2.5 billion euro fund to invest in senior and stretched senior loans to European middle market companies.

Tyne and Wear’s allocation follows a record year of fundraising for the global private debt market.

According to research firm Preqin, $107 billion was raised globally from institutional investors in 2017, with direct lending accounting for more than half the amount.

UK pension schemes are increasingly investing money into the growing private debt market.

The Strathclyde Pension Fund, a 20 billion pound Scottish fund, announced a 250 million pound commitment to Alcentra’s third European direct lending fund in December, more than double its previous commitment to the firm.

(The online version of this story corrects million to billion in paragraphs 2,5,7 and 9)

Editing by Tessa Walsh

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