Iowa Seeks Funds Of Hedge Funds For $600M Mandate

Aug 2 2007 | 11:11am ET

The $20 billion Iowa Public Employees Retirement System has issued a request for proposal for one or more fund of hedge funds manager as the final stage for its portable alpha program implementation.

The $600 million mandate will be for a six-year period from its date of inception. The system is looking for a low volatility fund of funds with a target absolute risk of 5% or less annually, suitable for use in a portable alpha strategy. Firms that hold their portfolios close to the vest need not apply as the system is also seeking “a high level of transparency” into the firm’s investment and risk management processes, including occasional participation of IPERS staff in due diligence meetings with underlying hedge fund managers.

The minimum requirements for the mandate include a “proven” three-year performance record (simulated or back tested results for any or all of the period will not be accepted), at least $500 million in combined total assets under management in all low volatility funds and accounts, no leverage employed at the fund of funds level, and a willingness to accept a performance-based fee arrangement for payment.

The RFP is available electronically on consultant Wilshire Associates’ Web site.

The deadline for proposals is August 21 at 3:00 p.m. CST.

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