Iowa Public Employees’ Retirement System, Des Moines, issued an RFP for managers to run up to a total $400 million in U.S. direct lending strategies, the pension fund’s first allocation in the asset class.
IPERS, which oversees $27.2 billion, could hire two or more managers, the RFP states.
Funding could 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, Karl Koch, chief investment officer, said in an e-mail. IPERS has not yet decided how much funding will come from each manager.
The pension fund plans to allocate between $200 million and $400 million, focusing on strategies of extending credit, predominately first lien senior loans, diversified by industry, to U.S. companies with annual earnings between $5 million and $75 million before interest, taxes, depreciation and amortization.
The RFP is available on IPERS’ website. Proposals are due Dec. 11. IPERS’ investment board expects to make a decision in March.
Wilshire Associates, IPERS’ investment consultant, is assisting in the search.