City of Austin Commits $90M to 1st Direct Lending Fund

The City of Austin Employees’ Retirement System, which oversees $3 billion in assets, hired its first private credit fund with a $90 million commitment.

The pension fund is slated to invest 1% to 3% of assets in private credit/direct lending. Initially, the investment is to be classified as fixed income – investment grade credit under the current asset mix.

Blue Owl Diversified Lending Fund, which targets senior secured loans with floating rates, aiming for about 75 to 100 loans, was selected at the January trustee meeting.

The fund’s primary focus is on privately-owned, sponsor-backed middle market companies in the U.S., with an EBITDA ranging from $10 million to $250 million. Managed by Blue Owl Capital, the strategy represents continued growth for the firm’s roughly $80 billion credit business.

Other investors in the Blue Owl fund include Jacksonville, FL Police and Fire Pension Fund that committed $20 million last fall.