Iowa Public Employees’ Retirement System, Des Moines, hired Monroe Capital and Tennenbaum Capital Partners to mange a total of $400 million in middle-market direct lending strategies, Karl Koch, chief investment office, said in an e-mail.
The hirings are subject to final due diligence and contract negotiations.
The allocation between the two manages has yet to be determined, said Mr. Koch, who couldn’t be reached for further comment.
IPERS oversees $27.7 billion in assets
The pension fund expected 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 said in November when an RFP was issued.
Mr. Koch said at that time funding was expected to come from a reallocation within IPERS’ credit opportunities allocation by reducing a high-yield portfolio 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.
Investment consultant Wilshire Associates assisted in the search.