Brett Johnson
State’s pension consultant Meketa recognises problems underlie default headlines, but notes private credit is ahead of public markets in working through the cycle.
Endowments and foundations using outsourced investment offices increasingly view GP-led secondaries as a way to deploy capital more quickly into private markets, prioritising performance opportunities over liquidity concerns.
The $85bn pension system is scrutinising collateral quality and documentation in private credit funds as it evaluates re-ups and new manager relationships
Pension embraces secondaries, more active portfolio-management approach, as it ramps up to a 5% allocation target
Negative headlines about evergreen funds contributed to the California plan’s decision to abandon its initial $140m investment in those vehicles.
Even as the $40bn system deals with short-term underperformance, its pacing into the asset class is expected to increase in the coming years.
Staff at the $620bn California pension expect the new and increasingly diversified program to perform well amid software exposure concerns and redemption pressure headlines.
The endowment is also optimistic about resilient office assets and a market rebound amid renewed leasing momentum.
Washington heard from its consultant, Albourne Partners, that ramping up a private credit allocation in a stressed market may allow for stronger documentation and higher spreads.
Investing and banking sector leads debate the extent to which private credit’s problems could spiral at the Milken Institute Global Conference 2026.