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May 28, 2024

CT treasurer increases allocation of private credit in state pension fund

State Treasurer Erick Russell

As investors increasingly see private credit as a growth asset, Connecticut Treasurer Erick Russell plans to double the state’s private-credit allocation to 10% by 2027, the Wall Street Journal reported Friday.

Russell is the sole trustee for the Connecticut Retirement Plans and Trust Funds, which has more than $50 billion in assets under management.

Private credit is surging in popularity following a series of interest rate hikes, which are leading to higher returns, according to the WSJ. 

The WSJ cited a survey from S&P Global Market Intelligence that found nearly 61% of limited partners investing in private markets said they plan to expand their asset allocation to private credit this year.

The public sector has taken notice.

“I think private credit can provide differentiated and diversifying sources of return when compared to some of the traditional public-credit markets,” Russell told the WSJ.

The Connecticut Retirement Plans and Trust Funds has invested in private debt through HarbourVest Partners, Sixth Street Partners, Crescent Capital Group and Goldman Sachs, the article states.

Meantime, the California Public Employees’ Retirement System said it would increase its private-debt allocation to 8% from 5%, according to the WSJ.

Earlier this month, the state’s Principal Investment Officer Mark Evans and Investment Officer Kan Zuo presented Oaktree Opportunities Fund XII L.P., a private credit opportunity, to Connecticut’s Investment Advisory Council, according to an announcement from Russell’s office. 

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