GLOBAL - The Iowa Public Employees Retirement System is set to conduct a search for a real estate investment trust (REIT) manager focusing on the US market.
Karl Koch, chief investment officer, said the fund was happy with the performance of its existing domestic REIT manager, RREEF, and was simply looking to diversify the REITs manager space.
The pension fund may also consider hiring a global REITs manager, he said.
RREEF currently manages a domestic REIT portfolio for Iowa PERS valued at $225m (€161.8m).
The real estate manager was about 300 basis points behind its benchmark for the 2010 fiscal year that ended 30 June.
However, it has beaten the benchmark by 37bps over three years, 78bps over five years, 128bps over 10 years and 218bps since RREEF was hired in 1996. The benchmark used for the REIT portfolio is the Dow Jones Wilshire REIT index.
Iowa PERS - in conjunction with real estate consultant The Townsend Group - will decide on minimum qualifications, potential mandate size and deadlines for the search at next month's board meeting.
The fund currently has a targeted allocation of 8% for real estate and invests in the four main property types of office, industrial, retail and apartments.
It has a relatively conservative strategy, with the portfolio being 95% core, 5% value-added.
The pension fund's real estate managers are RREEF, ING Clarion Partners, INVESCO Real Estate, TA Associates Realty and UBS Realty Investors.