Iowa pension issues RFP for private credit, boosts alts exposure

The Iowa Public Employees’ Retirement System (IPERS) this past week issued an RFP that could see the $35 billion pension hiring multiple managers within private credit. Trustees approved an $850 million allocation to private credit products, as a new asset allocation approved last month boosted the asset class from 3% to 8% of assets or to $2.8 billion. Private credit strategies are actively managed in either a separately managed account and/or fund structure that makes investments in mezzanine lending, special situations, specialty finance, real assets credit and multi-strategy. “This RFP is substantial because it could mean hiring several managers in a variety of private credit strategies that will enhance the breadth of our overall portfolio,” IPERS CEO Greg Samorajski said. The plan is to shift substantial funds from core fixed income to private credit over the next one or two years, he added. Responses to the RFP are due November 10. Over the next few months IPERS intends to issue additional RFPs in response to the new asset mix. “This plan achieves higher portfolio efficiency by increasing the utilization of private market strategies in a lower return environment,” Samorajski said of the new target allocation. “As the fiduciary of the IPERS Trust Fund, I commend the IPERS Investment Board for its careful review of the asset allocation plan. The board is committed to the health of the pension plan for the nearly 400,000 members it serves.” Trustees also approved boosts to private equity, which is now 13% up from 11% previously, as well as private real assets with a move to an 8.5% target from 7.5%.

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