IPERS board hires two new private credit managers

The Investment Board of the Iowa Public Employees’ Retirement System (IPERS) has hired two new private credit managers.

The hirings are in response to the board’s decision in late 2020 to increase IPERS’ private credit target allocation from 3% to 8%, according to a news release.

The new managers include ArrowMark, which specializes in finance credit mandates, and HPS Investment Partners, which specializes in real assets credit mandates. Each will have a fund allocation of $100 million.

IPERS’ current private credit portfolio is largely composed of direct lending strategies. In October 2020 IPERS issued an RFP for managers with expertise in opportunistic credit strategies and received proposals from 80 respondents that met minimum requirements were broken up into specific areas, multi-strategy, mezzanine, specialty finance, real assets, special situations and other. The board approved multi-strategy and mezzanine managers during their meeting in March.

The board considered hiring additional managers, but will revisit that proposal after completing additional due diligence and fee negotiations with potential managers.

“IPERS continues to diligently and carefully select a range of investment managers with the unique expertise necessary to skillfully manage IPERS’ private credit portfolio,” IPERS CEO Greg Samorajski said. “We feel optimistic about the future of the market and believe that with our Board’s good guidance, we are implementing an allocation plan that supports the needs of our pension system and its members.”

IPERS also announced that the IPERS Trust Fund had a value of $40.4 billion as of March 31, 2021 — the fund’s highest quarter-end value ever, represents growth of almost $1.5 billion since the end of 2020.