The fund, SSG Secured Lending Opportunities III, was launched in April and will focus on lending to firms in the Asia-Pacific region.
The $76.9-billion pension fund disclosed its allocation to the Asian credit and special situations-focused investment firm in materials for its June 2 investment advisory committee meeting.
SSG Capital’s filing with the US Securities and Exchange Commission did not specify a target for the fund. The firm closed SSG Secured Lending Opportunities I at $325 million in 2015 and its successor Fund II at $815 million in 2017.
SSG anticipates increased demand for private financing transactions with enhanced pricing and compelling risk-reward profiles, as well as an increase in the supply of performing or non-performing assets sold by financial institutions.
Established in 2009, SSG Capital was founded by former Lehman Brothers Asia Special Situations Group execs Edwin Wong, Shyam Maheshwari, and Andreas Vourloumis. In January this year, US-based private equity firm Ares Management announced it was acquiring a controlling interest in SSG Capital as a springboard for its Asia expansion.
Headquartered in Hong Kong with offices across Asia, SSG manages private credit and special situations funds totalling approximately $6.2 billion as of September 30, 2019.
The allocation to SSG Capital’s latest lending fund is not the first by Virginia Retirement System. In January 2019, the pension fund had disclosed a $150 million commitment to SSG Capital Partners V.
SSG held the final close for its fifth flagship fund at $1.9 billion and raised an additional $825 million for a sidecar fund in December 2019. Like its predecessor funds, SSG Capital Partners V invests principally in special situations and distressed investments in the Asia Pacific, with a focus on China, India and Southeast Asia.
The $300 million allocation to SSG’s latest fund was part of the $985 million in alternative asset commitments made by Virginia Retirement System, spokeswoman Jeanne Chenault confirmed in an email.
In credit strategies, aside from the allocation to SSG Capital Management’s fund, the pension fund also committed $300 million to Farallon Special Situations Fund, a vehicle by Farallon Capital Management focused on opportunistic investments globally.
In private equity, the pension fund committed $85 million to Spectrum Equity IX, a fund managed by growth equity firm Spectrum Equity.
Another $150 million was committed each to Taurus Mining Finance Fund No 2 and Stonepeak Infrastructure Partners Fund IV under the pension fund’s real assets allocation.
As of March 31, Virginia Retirement System’s asset allocation included a 14.3 per cent exposure to private equity, 13.8 per cent to credit strategies, and 14.5 per cent to real assets.
Virginia Retirement is an independent state agency that administers defined benefit, defined contribution, and hybrid plans along with other benefits for the state’s public sector employees.
Last December, the pension fund committed $150 million to the fifth buyout fund of MBK Partners, the North Asia-focused PE fund set up in 2005 by former Carlyle Group Asia executives.