A $41 Billion Pension Fund Is Betting Big on Private Credit
- Arizona retirement system boosts direct-lending stake to 17%
- Private-debt managers see start of an industrywide shift
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Arizona’s $41 billion State Retirement System is looking to dedicate one out of every six dollars it manages to direct lending -- more than five times the industry average -- in a move some see as a harbinger of what’s to come for the booming asset class.
Investors have plowed hundreds of billions of dollars into private-credit funds in recent years, lured by premiums that are more than five percentage points higher than competing public debt. Yet less than 3% of pension portfolios were dedicated to the sector as of December, according to London-based research firm Preqin. That may be about to change.