KCERA Flags Private Credit Gap; Tulare Weighs OCIO Shift

KCERA Flags Private Credit Gap

Tulare Weighs OCIO Shift

Two California pension boards used their September meetings to weigh changes to how their private markets programs are run, from Kern County Employees Retirement Association's planned build-out of its alpha pool to Tulare County Employees' Retirement Association's review of its outsourced investment model.

KCERA, the $7.4B Kern County plan, is looking to modestly expand its hedge fund-focused alpha pool after adding a macro specialist and a commodity specialist to the broader hedge fund portfolio, even as private markets remain roughly 2.8 percentage points below the plan's policy target. CIO Daryn Miller said the plan's actuary has warned that falling contributions in roughly nine and a half years will eventually force a shift toward more liquid assets, pressuring the illiquid sleeves it is still trying to fill.

The $2.5B TCERA board directed staff to return with firmer cost estimates for an outsourced CIO structure, a move that could strip its general consultant of the discretionary mandate it currently holds over the plan's private equity and private credit manager selection. The review follows a performance comparison showing TCERA trailing a similarly sized peer plan over the trailing 10 years.

Among other allocators, CalPERS disclosed approximately $21B in manager commitments and funding increases across private equity, private credit, real assets, and fixed income for the quarter ended March 31; and Maine Public Employees Retirement System approved roughly $610M in new commitments, led by $500M to an Ares Management-managed direct lending vehicle, while also rolling approximately $280M of existing exposure into a new Meridiam infrastructure fund.

On the GP fundraising side, ARCHIMED closed its fourth healthcare buyout fund, MED IV, at its €1.5B hard cap after just six months in market; KKR raised $6.6B at the first close of its third Asia-Pacific infrastructure fund; and ICG closed its ninth European structured capital fund at a €12B hard cap, calling it the largest dedicated structured capital fund raised to date.