Iowa Public Employees’ Retirement System, Des Moines, hired State Street Global Advisors to manage $300 million in a passive REITs strategy, pending negotiations, said a board meeting summary prepared by Karl Koch, chief investment officer.
Funding will come from terminating RREEF Securities, which manages the $300 million in active REITs for the $27.6 billion pension fund.
Iowa PERS issued separate RFPs in May for searches for active and passive U.S. real estate investment trust managers of a total $300 million to evaluate “a potential replacement for an existing active REITS manager, RREFF Securities, as well as the addition of a low-cost liquidity source for rebalancing within the real estate portfolio,” the summary said.
The pension fund undertook the searches because of personnel turnover at RREEF Securities.
Wilshire Associates, Iowa PERS’ investment consultant, assisted with the search.
“After reviewing all of the proposals, staff and Wilshire concluded that hiring any of the active managers in addition to a passive manager would not materially improve the risk-adjusted return of the IPERS’ REITs portfolio,” the summary said. As a result, Iowa PERS dropped the active REITs RFP and considered only passive proposals.