Texas Retirement Bolsters Direct Lending, PE Portfolios

The Texas County & District Retirement System (TCDRS) allocated approximately $325 million to direct lending and private equity funds over the past month. These investments spanned eight funds from March into early April, while the $50 billion retirement system has sidelined new commitments to areas like strategic credit, distressed debt, hedge funds, and real assets.

In private equity, TCDRS committed $225 million, with Shine Capital III, an early-stage venture capital fund, securing the largest share at $75 million. Founded in 2020 by venture capital veteran Mo Koyfman, Shine Capital has backed companies in sectors including consumer, enterprise software, AI/ML, crypto, fintech, and healthcare.

An additional $50 million was distributed across several Lightspeed Venture Partners funds: Lightspeed Venture Partners XV-A (Inception), Lightspeed Venture Partners XV-B (Ignite), and Lightspeed Venture Partners Select VI. Lightspeed has also received recent commitments from the Illinois Municipal Retirement Fund and the Tennessee Consolidated Retirement System in prior months.

Mainsail Partners VII received $60 million in commitments, split between two tranches. Mainsail Partners, a growth equity firm, targets investments in fast-growing, bootstrapped software companies. Its prior fund wrapped up in 2022, raising $915 million in total commitments.

Finally, within private equity, Hughes Growth Equity Fund II secured a $40 million investment from TCDRS. Overseen by Hughes & Co., this fund series concentrates on healthcare software and technology-enabled services firms.

A single new commitment of $100 million was allocated within the direct lending portfolio, per investment disclosures. This commitment went to SKY Fund VI Onshore, managed by SKY Leasing, which aims to offer capital solutions to airlines for fleet modernization, primarily via sale-leaseback transactions involving new aircraft deliveries.