Chicago Teachers' Pension Fund Wants to Enter Market for Private Debt.

The Chicago Teachers' Pension Fund, the oldest public retirement system in Illinois, is planning to invest up to $350 million in the private credit market. The fund has issued a request for proposals to multiple private credit investment managers, with a deadline of January 19. This move comes as public pensions are increasingly attracted to the private credit market due to its outperformance and regular cash distributions. The fund's decision to invest in private credit was based on a study prompted by changing expectations for returns from higher interest rates and inflation. The allocation will represent about 3% of the fund's assets. The fund is seeking investment managers with a minimum fund size of $500 million and is not considering secondaries strategies or niche products such as fossil fuels or real estate. The Chicago Teachers' Pension Fund serves over 94,000 members and paid out nearly $1.6 billion in retirement benefits and health insurance in fiscal 2023. However, its assets only cover about 47% of its long-term liability. [Extracted from the article]