NORTH AMERICA – The Iowa Public Employees Retirement System has narrowed its $200m (€153m) debt fund manager search down to four companies.

The finalists for the mandate are Blackstone Real Estate Debt Strategies II, Oaktree Real Estate Opportunities Fund VI, Principal Real Estate Debt Fund and Torchlight Investor Debt Opportunity Fund IV.

The pension fund and its investment consultant Wilshire Associates hope to conclude the search in the coming months. Twenty-six funds responded to the RFP.

Iowa PERS will be looking to invest in debt that uses a variety of structures such as mezzanine, b-notes, first mortgages and some preferred equity deals. 

The funds will only be making investments in the US.

According to an email from Iowa PERS, the scheme has placed RREEF on watch due to concerns about the potential impact of the failed Guggenheim buyout.

RREEF now manages two separate account real estate portfolios for Iowa PERS. 

There is a core separate account private portfolio valued at $39m, as of 30 September. 

RREEF is also is a REIT manager and oversees a portfolio valued at $30m.

Iowa PERS owns a real estate portfolio valued at $2bn. Its targeted allocation for the asset class is 8%.

Meanwhile, Marin County Employees' Retirement System has decided to opt out of the Cornerstone Patriot Fund and will look to hire an additional core, open-ended fund manager for a commitment of $15m.

Jeff Wickman, retirement administrator at the pension fund, said: "We made this decision because we were concerned about the future performance of the commingled fund when its portfolio manager left the company earlier this year."

It was announced in September that Brian Murdy would leave the company. Marin County had made a $15m commitment into the Patriot Fund in July. 

Wickman said the performance of the fund had been solid while the pension fund was invested. 

The lack of an entry queue should allow Marin County to exit the fund at the start of the next quarter. 

The Patriot Fund had a gross asset value of $1.7bn, as of the end of September. Marin County had also committed $15m into the UBS Trumbull Property Fund in July. 

Wickman said: "I would expect it will be anywhere from six to nine quarters before our capital is called into the fund." 

The reason for this is that UBS has an entry queue of $2.7bn, as of the end of September.
Marin County has a real estate portfolio valued at $139m, as of the end of September.

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