Iowa Pension Recommends 9 New Managers for Real Assets Portfolio

The $43.4 billion Iowa Public Employees’ Retirement System is going through an overhaul of its real assets portfolio, aiming to increase its allocation to real assets and internal co-investments and restructuring the fund’s real estate portfolio.

At the fund’s June 20 investment board meeting, the evaluation committee of IPERS recommended nine investment managers to the board as a part of this real assets strategy. Nine firms were selected out of 154 respondents to an RFP issued in November 2022.

As part of the search, five real estate managers and funds were identified; Kayne Anderson Capital Advisors KAERP VII, KKR’s KKR REPA IV, Blue Owl’s Net Lease Property Fund, LCN Capital Partners’ North American Fund Series, and Elm Tree’s Net Lease Fund Series.

IPERS also identified four infrastructure funds as a part of the search: Macquarie Asset Management’s Infrastructure Partners VI, Morgan Stanley Investment Management’s NHIP IV, Stonepeak Partners’ Infrastructure Fund Series and Energy Capital Partners’ Energy Fund Series.

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As of May 31, IPERS had made only $37 million in commitments to private real assets this year, although up to $500 million is planned to be committed to this strategy this year, according to the fund’s 2024 investment plan.

The fund’s commitment plan for its private equity and private credit portfolios is on pace, having committed $295.5 million and $125 million to these strategies as of May 31, with commitment targets of $700 million and $500 million, respectively. The fund also plans to commit up to $200 million to internal co-investments, although no commitments have been made this year so far.

As a part of the real asset portfolio restructuring, the fund plans to liquidate its farmland and timberland holdings and slightly reduce its core real estate holdings, to add value-add infrastructure, value-add real estate and co-investment strategies.