Iowa Retirement Plans $2.4B Investment in Private Markets

The Iowa Public Employees’ Retirement System (IPERS) delineated its private market investment strategies for 2025 and appointed five absolute return managers during the trustees’ December meeting.

The investment team presented a $2.35 billion strategy for private markets. Officials sanctioned up to $650 million for private credit, $700 million for private equity, and up to $1 billion for private real assets.

IPERS’ allocations to private equity, private credit, and private real assets are 17.4%, 6.0%, and 6.7%, respectively. In the long term, IPERS aims to allocate 17.0%, 8.0%, and 9.5% to the respective portfolios.

The board of the $44 billion fund also approved hiring five investment firms and strategies for its absolute return search, including AQR Capital Management’s AQR Helix Strategy; Brevan Howard’s Brevan Howard Strategies Master Fund Limited; Bracebridge Capital’s Bracebridge Absolute Return Composite; Blackstone’s Blackstone Strategic Opportunity Fund; and Davidson Kempner Capital Management’s Navigator Fund.

Officials did not provide the total allocation size for the asset class, and the allocations to each firm remain undetermined. The firms were chosen via a Request for Proposal published by IPERS in January 2024.

IPERS achieved its highest funded ratio this year since fiscal year 2002, when the ratio was 92.6%. IPERS’ investment program achieved a 9.07% return in FY2024, surpassing its 7% forecast. The performance resulted in an actuarial gain of $245 million.

“Because of superior management of its investment portfolio and sufficient contributions from members, IPERS is growing its funded ratio and shrinking its unfunded liability more quickly than anticipated,” IPERS CEO Greg Samorajski said.