Summary of November public pension plan commitment summary points:
This was the first time in a few months we saw yields decline across all fixed income sub sectors, especially credit sensitive areas with floating rate/CLO/variable rate/private credit structures as some of the best performing areas.
The public equity markets also saw toned down volatility, and continued price improvement.
Public pension funded ratio index saw a meaningful improvement increasing from 70% in October to 75% in November.
November we saw 158 individual commitments totaling $20.1 B allocated among managers. This compares to 90 commitments made last month which was below the average seen during through the year. 43 individual pension funds made commitments during November.
The top allocators in the month were:
California Public Employees' Retirement Systems allocating $8,942,000
New York State Teachers Retirement System allocating $1,600,000
Florida State Board of Administration allocating $1,307,000
Asset Classes- building on a trend from last month when looking at asset classes, Private Equity had been allocated the most top asset class at 29% of commitments, with Private Credit further closing the gap with 25%, and Private Real Estate with 18%.
Sub Asset Classes-building on a trend that has strengthened all year, Infrastructure allocations were the top sub-asset class with 16%, Opportunistic PE was allocated 12%, and Middle Market Buyout allocations taking in 9%. Following up the continued news flow in the VC fundraising world, these commitments stayed consistent at 5% of the month’s allocation and in line with the trends we have seen through the year and reminds us that data and “news” can indeed diverge.
Looking at the top allocations made this month, the large allocations made by CALPERS were reflected by via Tower Bridge Infrastructure Partners being allocated $1.5 billion, Golden Reef Infrastructure Trust being allocated $1.26 billion also by CALPERS, and Owl Rock Diversified Lending an opportunistic private credit strategy being allocated $1 billion also by CALPERS.
It is worth highlighting that allocations in non-US equities continue as Walter Scott Intl Growth was allocated $440 million by the Maryland State Retirement System, and over $600 million split among three managers ( KAR, Times Square, and Allspring) by the Florida State Board of Administration. The non-US public market allocations have been increasing since Q2 in the areas of international value, international growth, and emerging market equity.