Fall Surprise: Direct Lending Funds Attract US Pensions

fall

Direct lending funds are continually attracting U.S. pension fund investors. These pension funds are searching for yield and in effect, the committed capital can be perceived as high-risk bank lending. These commitments are falling under many pensions’ high-yield allocation. For example, in late October, the Orange County Employees’ Retirement System (OCERS) committed up to US$ 60 million to OCP Asia’s Orchard Landmark direct lending fund. Formed in September 2009, OCP was created by Stu Wilson and Teall Edds, both from Stark Investments. Essentially, OCP was a spin-off of Stark Investments’ Asian investment operations.

Tighter financial regulation and banks retreating from the frontlines have spurred a decrease in traditional financing choices for mid-sized business in the US.

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