Month / October 2017

by dietrichknauth

Iowa launches unconventional RFP to seek alpha unconstrained by asset class

The Iowa Public Employees Retirement System (IPERS) has issued a request for proposals for active investment management services, saying that it will seek top-performing managers regardless of the manager’s asset class or benchmark.

The $31bn system is looking for a separately managed account that gives the manager full discretion to actively implement their investment selection and portfolio construction process, as long as the investments are primarily comprised of liquid, publicly traded securities. IPERS is also looking for public market investment products that show “persistent risk-adjusted alphas that are uncorrelated with IPERS’ strategic asset allocation, liabilities, and the alphas of other public market products within the IPERS investment program.”

Wilshire Consulting, which is assisting IPERS with the search, said that the unconventional RFP will help the pension fund take a more holistic view of
its public markets portfolio options and identify top-performing managers
across a range of traditional asset class “silos.”

“This search is unique in the way that IPERS is approaching it, which is taking a deeper dive into the excess returns that managers are producing in relation to their benchmark,” Ali Kazemi, managing director at Wilshire, told MMR.
Published by Money Management Report/Pageant Media.

Read the full story: Iowa launches unconventional RFP to seek alpha unconstrained by asset class

Published by Money Management Report/Pageant Media.

by dietrichknauth

Investor profile: Washington State doubles down on private markets

The Washington State Investment Board (WSIB) is more committed to private markets than most of its institutional peers, recently allocating nearly half of its $120.4bn in assets to private equity, real estate and tangible assets.

The new allocation doubles down on Washington State’s already aggressive commitment to private markets, widening the gap with other public pension funds, most of whom favor higher targets for global and domestic public equity – asset classes that have offered high returns at relatively low costs since the 2008 financial crash.

CIO Gary Bruebaker acknowledges that Washington State is something of an outlier in its asset allocation strategy, but said the reason behind it is simple – Washington expects private markets to outperform public markets over the long term.

“Our since-inception [1981] return is 484 basis points higher than our public equity return,” Bruebaker told MMR. “Securing the financial future for over 400,000 public employees is the reason we invest in private markets.”

At its September meeting, the board approved a four-year asset allocation strategy that cuts its public equity target from 37% to 32% and uses those savings to increase real estate from 15% to 18% and tangible assets from 5% to 7%. The board left both fixed income and private equity unchanged, at 20% and 23%, respectively, but would have
committed more to private equity if it thought it could realistically achieve those goals, Bruebaker said.

Read the full story: Investor profile: Washington State doubles down on private markets

Published by Money Management Report/Pageant Media.