Pension Funds Chase Returns in Private-Market Debt - WSJ

February 17, 2022

This Wall Street Journal article, written by Heather Gillers, cites Burgiss’ performance data in its discussion of the current trend of state pension funds across the country allocating a higher percentage of their investments to private credit, which has amounted to tens of billions of dollars in private-credit holdings in the U.S.

According to the article, “‘At the $50 billion Arizona State Retirement System, which first created a 3% target for private debt in 2012, more than 21% of the portfolio is now invested in the asset class. Private credit “has proved to be a better source of returns” than publicly traded debt investments, said Deputy Chief Investment Officer Al Alaimo.

Annualized five-year returns are 8.84% for the Cliffwater Direct Lending Index and 9.04% for a group of private-credit funds, not including distressed debt, tracked by the data-analytics firm Burgiss. That compares with 4.27% for U.S. corporate bonds and 5.24% for U.S. junk bonds, according to Bloomberg indexes.’”

Read the article here. A subscription to the Wall Street Journal may be required.