Iowa Public Employees Retirement System has ended a separate-account relationship with RREEF Securities as a domestic REIT manager.

The pension fund made the decision due to personnel changes at RREEF and performance issues over the past 12 months, with the manager unable to reach Iowa’s benchmark for its separate account. Iowa has replaced RREEF with State Street Global Advisors.

RREEF managed a $370m (€291.6m) account and used the Wilshire US REIT Index as its benchmark.

State Street Global Advisors will have a passive strategy and will manage a portfolio valued at around $300m. A benchmark for State Street is yet to be decided.

Karl Koch, CIO for the pension fund, said it would use the transition to rebalance its real estate portfolio with $70m not allocated to the manager.

Iowa began an RFP process in April with a view to making the change, with 21 responses. Most of the responses were with active strategies.

The pension fund said investment staff and its consultant, Wilshire Associates, had concluded that hiring any of the active managers in addition to a passive manager would not materially improve the pension fund’s risk-adjusted returns.

With only passive REITs considered, State Street was chosen over the other passive finalist, BlackRock.

Iowa PERS said State Street was hired for its low cost proposal. The pension fund will not release the difference in fees between the two finalists until negotiations with State Street are complete.

The pension fund is expecting the transition of assets from RREEF to be completed by the end of the year.