Iowa Public Employees' Retirement System, Des Moines, plans to issue an RFP in a search for managers to run an estimated $200 million to $400 million in direct lending strategies, said Karl Koch, chief investment officer, in a statement.
IPERS, which oversees $27.2 billion, could hire more than one manager. It plans to issue the RFP by the end of the year.
Funding would likely come from reducing high-yield portfolios managed by Aegon USA Investment Management, with $515 million, and Oaktree Capital Management, with $480 million, and an emerging markets fixed-income portfolio managed by Western Asset Management Co., with $395 million, Mr. Koch said. “IPERS has not yet determined how much funding will come from each mandate,” he added.
IPERS expects to use separately managed accounts for the direct lending portfolios, focusing on strategies of extending credit to U.S. borrowers, although it might consider allocations in some European countries, Mr. Koch added.
Wilshire Associates, IPERS' investment consultant, will assist in the search.
The pension fund plans to post the RFP on its website.
