Iowa puts $400 million in BlackRock small-cap strategy, terminates 4 large-cap managers


Iowa puts $400 million in BlackRock small-cap strategy, terminates 4 large-cap managers – Pensions & Investments

<br /> Iowa Public Employees’ Retirement System made several changes to asset class structures and hired BlackRock for a small-cap equity allocation.James Comtois<br /> <br /> Iowa Public Employees’ Retirement System, Des Moines, made several changes to its equities and public real assets allocations, confirmed Judy Akre, spokeswoman for the $31.4 billion plan.</p> <p>For domestic equities, IPERS hired <b>BlackRock</b> to manage $400 million in a scientific active equity U.S. small-cap strategy. </p> <p>The system will also reallocate $2.1 billion to existing passive U.S. equity index funds managed by Mellon Capital Management, which now manages about $2.4 billion in that strategy.</p> <p>Those moves were funded by terminating four U.S. large-cap equity strategies:</p> <ul id="1544719773908799"> <li>J.P. Morgan Asset Management’s $944 million enhanced index portfolio. </li> <p></p> <li>PanAgora Asset Management’s $915 million enhanced index strategy. </li> <li>Wellington Management’s $400 million value strategy. </li> <p></p> <li>Columbia Threadneedle Investments’ $367 million growth portfolio. </li> </ul> <p>Wellington and PanAgora were terminated for performance issues, while JPMAM and Columbia are being terminated to reduce the plan’s active risk allocation to U.S. large-cap equity. Wellington spokeswoman Sara Lou Sherman declined to comment. A spokesman for PanAgora could not be immediately reached for comment.</p> <p>For international equities, IPERS’ international equities program will be restructured to a Europe, Australasia, Far East plus emerging markets structure from its current regional focus. The board plans to convert an existing $1.2 billion scientific active equity European strategy managed by BlackRock to a BlackRock-run scientific active equity EAFE mandate. </p> <p>IPERS will terminate Quantitative Management Associates’ $600 million and GAM’s $234 million Pacific Basin equity strategies. </p> <p>For public real assets, the pension fund also agreed to allocate an additional $730 million to an existing BlackRock passive Treasury inflation-protected securities index fund; BlackRock now runs $760 million in TIPS. Funding will come from terminating BNP Paribas Investment Partners’ active TIPS strategy. </p> <p>In addition, IPERS put Wadhwani Asset Management’s $75 million liquid absolute-return strategy on watch for organizational issues due to an announced change in ownership of the firm. PGIM announced last month it would acquire the firm.</p> <p>Meanwhile, Aegon Assest Management’s $400 million U.S. high-yield strategy remained flagged for organizational issues, while Oaktree Capital Management’s $380 million U.S. high-yield strategy also remained on IPERS’ watchlist for performance issues. </p> <p>Next year, IPERS anticipates committing up to $200 million to existing managers in its private credit program, and up to $300 million to private real assets in 2019. IPERS’ private equity manager, Pathway Capital Management, will also be authorized to commit up to $700 million to private equity investments at Pathway’s discretion in 2019. The pension has a 12.83% allocation to private equity and 6.15% to private real assets.</p> <p>The decisions were announced at the board’s Dec. 6 meeting. </p> <p>

Original Source