Iowa Public Employees’ Retirement System, Des Moines, plans to issue RFPs this spring for private commercial real estate debt and private corporate lending separate account managers to run $250 million each, said a summary of last week’s board meeting provided by a spokesman.
At least one private real estate debt and one private lending manager is expected to be hired.
The selected managers would have some flexibility to make opportunistic investments, according to the meeting summary.
The RFPs are expected to be posted on the $28.5 billion pension fund’s website. Karl Koch, chief investment officer, did not have information on a timeline for a hiring decision or funding sources.
Separately, equity managers PanAgora Asset Management and Columbia Threadneedle Investments were put on watch for performance.
PanAgora manages $983 million in an S&P 500 enhanced index strategy, and Columbia manages $388 million in a U.S. large-cap growth equity strategy for the pension fund.
A Columbia spokesman declined to comment. A PanAgora spokeswoman could not immediately be reached for comment.
In other news, the pension fund returned a net 7.84% in calendar year 2016, below its benchmark of 8.41%, hampered primarily by active public equity returns.
Broken out by asset class, domestic equities returned 10.4% (vs. its 13.4% benchmark), international equities, 4.3% (5%), core-plus fixed income, 4.1% (3.9%), public credit 14.6% (14.9%), short-term investment fund, 0.5% (0.3%), and private equity 12% (12%). Returns for public real assets, private credit and private real assets were not available.
For the three, five and 10 years ended Dec. 31, the pension fund saw annualized returns of 5.5%, 8.5% and 5.8%, vs. benchmark returns of 5.7%, 8.9% and 6.2%, respectively.
At the end of 2016, the pension fund had an asset allocation of 27.4% core-plus fixed income, 25% domestic equities, 16.6% international equities, 11.8% private equity, 7.2% public real assets, 6.6% private real assets, 3.6% public credit, 0.5% private credit, and 1.3% cash.