Illinois Pension Fund Aims to Commit Up to $1.2B in Private Credit Funds Over Next Two Years

The $50.4 billion Illinois Municipal Retirement Fund (IMRF) recently issued a request for proposal (RFP) for direct lending, opportunistic, and distressed and special situations private credit funds.

IMRF intends to make annual commitments of up to $500 million to $600 million to private credit fund(s) over the next couple years and may consider commitments for the 2023 and 2024 allocation years as part of the scope of the RFP.

The goal is to invest approximately 60% in direct lending strategies and 40% in opportunistic, distressed and special situations strategies.

The pension fund recently committed over $200 million to private equity funds and the board approved the formalization of the private equity co-investment program.

Private equity powerhouse Khosla Ventures received a $75 million allocation across three funds – Khosla Ventures Fund VIII, Khosla Ventures Seed F and Khosla Ventures Opportunity II.

Meanwhile, another $50 million in commitments were made to real assets, including AEW Partners Real Estate Fund X, managed by AEW Capital Management. IMRF already has $320 million invested with AEW funds.

In its diverse manager program report, IMRF said it invested $12.1 billion in minority-owned investment management firms in 2022. These managers invest up to 25.2% of the pension system’s total assets.