CalSTRS commits $350m to Angelo Gordon and GSO

The $133bn pension committed up to $250m to a Blackstone/GSO fund that will provide capital to distressed companies, and $150m to an Angelo Gordon distressed debt fund.

The California State Teachers’ Retirement System has recently committed $350 million to funds managed by The Blackstone Group’s GSO Capital and Angelo Gordon that focus on distressed debt.

CalSTRS, with $132.6 billion in assets, committed $250 million to Blackstone/GSO Capital Solutions Fund, which is targeting $2 billion to provide capital to companies experiencing financial distress. The fund has raised at least $850 million.

The pension – which values its private equity portfolio, including unfunded commitments, at $28 billion – committed $150 million to AG Capital Recovery Partners VII, which is targeting $1 billion for non-control distressed securities investments, according to CalSTRS documents.

The $1 billion target is lower than a $3 billion target for the Angelo Gordon fund that was discussed in the minutes of a meeting of the Fresno County Employees’ Retirement Association meeting last July. The Fresno documents show Angelo Gordon was trying to raise $2 billion for the main fund and $1 billion for reserve capital.

AG Capital Recovery Partners VII has management fees of 1.5 percent of committed capital in the core fund, and 1.5 percent of net funded capital in the reserve fund, plus 1.25 percent management fee for commitments of $250 million or more, according to the Fresno pension documents. It’s not clear if or how the terms have changed, and no one from the firm was available for comment Friday.

CalSTRS, which has a 12.7 percent allocation to private equity, has committed $542 million in the fiscal year to date. The pension has contributed about $1.4 billion so far this fiscal year, and received distributions of about $668 million.