Iowa Public Employees Retirement System (IPERS) is planning to expand its core investment mandate and issue a request for proposal (RFP) for managers to help narrow the pension fund’s real assets allocation gap.
IPERS has a $1.3bn (€1.1bn) real assets allocation gap as a result of investing 5.3% of its total plan assets compared with an 8.5% target.
The pension fund said in a meeting document that the widened gap was due in part to the total plan assets significantly outpacing the growth of the real assets portfolio. Another reason is that investment activity over the last year across private real assets was constrained by COVID shutdowns and elevated pricing.
IPERS said outstanding commitments in the UBS Farmland separate account and the Brookfield Super-Core Infrastructure Fund were not invested during the period. As reported last year, IPERS was in talks to hire Brookfield as its first infrastructure fund manager with a $300m commitment.
The pension fund said it intends to address the allocation gap by allowing its core mandates to expand its investment strategy and to issue the RFP search in the second half of this year.
The pension fund’s existing real estate portfolio is focused on office, industrial, retail and apartments.
An expanded mandate could give the pension fund some exposure to single-family residential, manufactured housing, data centres, life science, medical office and self-storage.
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