US pension fund commits $100m to PAG’s fourth Asia loan fund

Sham Shui Po District, Hong Kong. Photo by Joseph Chan on Unsplash

The San Francisco Employees’ Retirement System (SFERS) has approved a capital commitment of $100 million to Hong Kong-based private equity firm PAG Asia Capital‘s fourth direct lending fund.

DealStreetAsia had earlier reported that PAG is gathering about $1 billion for Asia Loan Fund IV, which is part of the firm’s direct lending platform that seeks to offer senior secured and mezzanine corporate and real estate financing solutions to firms in Asia.

Direct lending funds typically cater to mid-market businesses that traditional banks are not keen on lending to. According to the 2019 Preqin Global Private Debt Report, direct lending funds had accumulated dry powder worth $109 billion as of June 2018.

The fund’s predecessor, Asia Loan Fund III, had hit its hard cap of $950 million last year. Launched in 2017, the third loan fund had a target of $750 million and was significantly oversubscribed. It secured capital commitments from a dozen LPs, including sovereign wealth funds and pension funds from North America, Australia, and Asia.

SFERS disclosed in a meeting Wednesday that the retirement board approved the investment, which is classified as a senior debt / direct lending investment within the pension fund’s private credit portfolio.

In October, SFERS gained 1.02 per cent, led by strong returns in public equity of 2.52 per cent. On a calendar year basis, public equity returned 20.40 per cent while private equity raked in 10.79 per cent returns. Fixed income, absolute return, and private credit have all posted returns ranging from 5.43 per cent to 7.54 per cent.

It added that investment returns this fiscal year will likely depend on how investors expect policy proposals on tax and regulation to impact the economy, job growth, and corporate profits.

SFERS, an active backer of Asia-focused funds, has an existing relationship with PAG. In July, the pension fund committed $50 million to PAG’s third special situations fund, which has a target of up to $1 billion.

The $30-billion pension fund had also committed $50 million to the PE firm’s third Asia-focused buyout fund that was closed last November at $6 billion, exceeding its initial target of $4.5 billion.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.