Calpers allots more than $1 billion to Sixth Street’s asset-based finance

California Public Employees’ Retirement System committed more than $1 billion to an asset-based finance strategy managed by Sixth Street, according to a person with knowledge of the matter.

Calpers — the largest public pension fund in the US — allocated the funds through a separately managed account overseen by Sixth Street in the second quarter, said the person, who asked not to be identified discussing confidential information.

A spokesperson for Sixth Street declined to comment. A Calpers representative declined to comment.

Sixth Street’s asset-based effort is led by Michael Dryden, who joined as a partner in 2022 from Credit Suisse Group AG, where he was global head of securitized-products finance.

In March, a consortium led by Sixth Street acquired lending platform GreenSky from Goldman Sachs Group Inc.

Sixth Street’s asset-based finance group focuses on deploying anywhere from $100 million to more than $2.5 billion across areas including commercial and residential mortgages, commercial equipment, renewables and energy finance, consumer asset classes, infrastructure debt and transportation.

The San Francisco-based investment firm was recently among the parties vying to acquire Discover Financial Services’ $10 billion student-loan portfolio, which Carlyle Group Inc. and KKR & Co. ultimately won, Bloomberg reported last month.

Alternative asset managers have increasingly touted compelling opportunities within asset-based finance, in part because traditional lenders have continued to retreat from the sector. The group includes around 40 investment professionals.

— By Gillian Tan (Bloomberg)