OP&F Investment notes, March 2024

Portfolio value: The OP&F portfolio was valued at $17.74 billion as of March 5.

Two real estate commitments approved

The OP&F Board of Trustees approved a pair of real estate commitments totaling $150 million during its March 6th meeting.

A commitment of up to $75 million was approved for AEW Partners Real Estate Fund X, a closed-end opportunistic fund focusing primarily on multi-family, industrial and medical/health care properties in the U.S. OP&F also has investments in AEW VII and AEW IX.

Oaktree Real Estate Opportunities Fund IX was also approved for a commitment of up to $75 million. Oaktree focuses on commercial and residential real estate through distressed debt acquisitions, rescue refinancing, discounted securities purchases and equity recapitalizations. The Oaktree fund will invest primarily in the U.S. but with a global component that could include Europe and Asia. OP&F also invests in Oaktree VIII.

The two funds are attractive to OP&F on a risk-adjusted basis and are a good complement to existing positions.

The real estate portfolio is valued at $1.84 billion, or 10.4 percent of the total portfolio. The target for real estate is 12.0%.

OP&F commits $25 million to private credit fund

The OP&F Board also approved a $25 million commitment to MC Credit Fund IV Levered Fund. The private credit fund provides primarily senior secured debt within the core U.S. middle market and focuses on loans to private companies. This is OP&F’s second commitment to MC Credit Partners.

The commitment is a part of the 2023-24 Private Credit Investment Plan, which runs until June 30, 2024. This is the fourth commitment of the plan year, which totals $200 million so far. The target for commitments for the plan year is between $235 million and $285 million. OP&F’s private credit portfolio is valued at $538 million, or 3.1 percent of the total portfolio. The current, interim target for private credit is 4.0 percent with an ultimate long term target of 5.0%.

OP&F posts solid returns for 2023 according to consultant’s report

Wilshire Associates, OP&F’s general investment consultant, presented the 4th quarter 2023 performance report for the OP&F portfolio. The report showed that OP&F had a net return of 9.04 percent for the calendar year 2023 and ended the year with a value of $17.64 billion.

Posted 3/07/2024