The $17 billion Iowa Public Employees Retirement System will issue 2-3 RFPs for portable alpha managers over the next 12-18 months, with the first, which is for enhanced cash portable alpha managers, likely to be issued at the end of September.
The fund began receiving an education on portable alpha last year. Melinda Prince, executive assistant, said that that the board has not yet determined the allocation size to portable alpha and the plan and consultant Wilshire Associates are still in the planning stages regarding the selection process. She said hedge funds to be utilized in the portable alpha space will be limited to fund-of-hedge funds.
The plan will discuss the searches at its Sept. 21 board meeting and will likely approve its first search at that time. All RFPs are posted on the plan's Web site (www.ipers.org).
The money for portable alpha will come from a restructuring of the plan's $6.3 billion domestic equity portfolio, a move made to improve the plan's risk-adjusted ratio. The restructuring will not eliminate any current domestic equity strategies or managers but may reduce some allocations to current strategies.
The plan also has lowered its maximum dollar limit on calendar year private equity commitments to 2% of the fund's prior year market value as of June 30, plus the value of distributions received from the private equity portfolio during the prior fiscal year. The previous limit was 3% of the market value, with no adjustment for private equity investment distributions.