With corporate defaults expected to keep soaring, the nation's largest pension fund, the California Public Employees' Retirement System, has
reallocated $2.3 billion from its stock holdings into a trio of distressed-debt funds run by Apollo Global Management LLC.
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According to Bloomberg, the pension fund "is supplying almost all of
the capital for three [Apollo] partnerships ... to buy bonds and bank
loans the firm deems cheap, according to regulatory filings."
The move
is part of Calpers' three-year plan to hold fewer equities, which
yielded 5.6% annually to the pension fund, compared with 17.3%
annually from distressed holdings from 1990 to 2006, according to
Calpers.
The Apollo partnerships were started in 2007, when Calpers put another $1.7
billion into seven other distressed debt funds, more than doubling its
commitments to the asset class. -- George White
See Bloomberg storySee story on PE fund raising on TheDeal.com
