Iowa Public Employees' Retirement System, Des Moines, made several changes to its equities and public real assets allocations, confirmed Judy Akre, spokeswoman for the $31.4 billion plan.
For domestic equities, IPERS hired BlackRock to manage $400 million in a scientific active equity U.S. small-cap strategy.
The system will also reallocate $2.1 billion to existing passive U.S. equity index funds managed by Mellon Capital Management, which now manages about $2.4 billion in that strategy.
Those moves were funded by terminating four U.S. large-cap equity strategies:
- J.P. Morgan Asset Management's $944 million enhanced index portfolio.
- PanAgora Asset Management's $915 million enhanced index strategy.
- Wellington Management's $400 million value strategy.
- Columbia Threadneedle Investments' $367 million growth portfolio.
Wellington and PanAgora were terminated for performance issues, while JPMAM and Columbia are being terminated to reduce the plan's active risk allocation to U.S. large-cap equity. Wellington spokeswoman Sara Lou Sherman declined to comment. A spokesman for PanAgora could not be immediately reached for comment.
The system in September hired PanAgora to run an undermined amount in the firm's Dynamic International Equity fund and the Dynamic International Equity Alpha fund.
For international equities, IPERS' international equities program will be restructured to a Europe, Australasia, Far East plus emerging markets structure from its current regional focus. The board plans to convert an existing $1.2 billion scientific active equity European strategy managed by BlackRock to a BlackRock-run scientific active equity EAFE mandate.
IPERS will terminate Quantitative Management Associates' $600 million and GAM's $234 million Pacific Basin equity strategies.
For public real assets, the pension fund also agreed to allocate an additional $730 million to an existing BlackRock passive Treasury inflation-protected securities index fund; BlackRock now runs $760 million in TIPS. Funding will come from terminating BNP Paribas Investment Partners' active TIPS strategy.
In addition, IPERS put Wadhwani Asset Management's $75 million liquid absolute-return strategy on watch for organizational issues due to an announced change in ownership of the firm. PGIM announced last month it would acquire the firm.
Meanwhile, Aegon Assest Management's $400 million U.S. high-yield strategy remained flagged for organizational issues, while Oaktree Capital Management's $380 million U.S. high-yield strategy also remained on IPERS' watchlist for performance issues.
Next year, IPERS anticipates committing up to $200 million to existing managers in its private credit program, and up to $300 million to private real assets in 2019. IPERS' private equity manager, Pathway Capital Management, will also be authorized to commit up to $700 million to private equity investments at Pathway's discretion in 2019. The pension has a 12.83% allocation to private equity and 6.15% to private real assets.
The decisions were announced at the board's Dec. 6 meeting.
