LACERA puts Cheyne in charge of $750m credit mandate

LACERA is folding hedge-fund and illiquid credit into a single managed account, approving up to $750m for Cheyne Capital Management to run a multi-asset credit hedge fund strategy through a dedicated vehicle. The appointment was disclosed in a report from last month's board of investments meeting and reported by Alternative Credit Investor.

The $93.9bn defined-benefit plan for county employees and other districts already invests across private equity, real estate, and credit, and its 13% credit target amounts to roughly $12.2bn at full funding, spanning high-yield, bank loans, emerging-market debt, and illiquid credit. Cheyne, a global alternative asset manager with $15bn under management across real estate, corporate credit, strategic value credit, and equity alternatives, covers much the same ground.

The proposed $750m works out to about 6% of the fully funded credit sleeve and 5% of Cheyne's assets under management, material but not transformative to either side. A dedicated managed account gives LACERA a portfolio that is its own, not a position in a commingled fund, and the multi-asset label lets high-yield bonds and illiquid credit sit in the same wrapper.

Pension boards have historically made credit commitments one fund at a time, opening a separate vehicle for each style. A managed account treats the whole credit map as a single budget, and Cheyne's range—real estate, corporate credit, strategic value credit—mirrors LACERA's credit target closely enough that weight can shift within one relationship.

For allocators watching private credit, the composition of the account is the detail to follow. If LACERA lets Cheyne move between liquid high-yield, bank loans, real estate credit, and strategic value credit inside one portfolio, the boundary between public and private credit will have stopped meaning much at this pension.