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Credit Funds Tracker: 25 September 2020

Global institutional investors allocated nearly $5 billion to credit funds this week.

In a recent survey conducted by placement agent Eaton Partners, nearly 40% of investors said they plan to either modestly or significantly increase their private market allocations before year end. This week, Iowa Public Employees Retirement System became the latest US public pension fund to increase allocations to private credit. Creditflux reported several US pensions have also outlined new allocations to private credit.

Following recommendations from investment consultant Wilshire Associates, the $33.9 billion Iowa pension increased private credit allocation targets from 3% ($1 billion) to 8% ($2.7 billion) at its 17 September meeting. It also increased allocations to private equity and private real assets. The pension funded the commitments from a reduction to its core fixed income allocation (28% to 20%), a trend which fund of funds manager Gaptstow summarised earlier this week. The Iowa pension plans to conduct a private credit request for proposal soon.

The UK's Border to Coast Pension Pool provided the largest commitments, after it chose Ashmore, Barings, PGIM and Wellington to manage components of its £2.7 billion ($3.4 billion) multi-asset credit fund. Barings will manage syndicated loans, PGIM securitised credit, Ashmore emerging markets and Wellington global high yield.

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