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Iowa Public Employees pension fund increases targets to private equity, private real assets

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Iowa Public Employees’ Retirement System, Des Moines, is raising its targets to private equity and private real assets, and reducing targets to public equities, fixed income, public credit and global smart beta.

The $40.1 billion pension fund’s investment board approved the changes following an annual asset allocation review at its meeting Thursday, spokeswoman Shawna Lode said in an email. No managers will be terminated as a result of the target changes, Ms. Lode added.

IPERS CEO Gregory Samorajski said in a news release Thursday that the strong performance of private equity for the past two years has meant its actual allocation well exceeds the current target.

“To avoid rebalancing illiquid assets and potentially diminishing the portfolio’s value, and to ensure vintage year diversification, the investment board responded with action that brings the allocations more in line with IPERS’ actual targets,” Mr. Samorajski said.

The target to private equity rises to 17% from 13%, while private real assets increases more modestly to 9.5% from 8.5%.

To fund the new targets, the board approved reducing the targets to domestic equities to 21% from 22%, fixed income to 19% from 20%, international equities to 16.5% from 17.5%, global smart beta to 5% from 6%, and public credit to 3% from 4%.

Targets that remain unchanged are private credit at 8% and cash at 1%.

As of June 30, the actual allocation was 22% fixed income, 21% private equity, 19% domestic equities, 15.5% international equities, 9% private real assets, 5% global smart beta, 4% private credit, 3.5% public credit and 1% cash.

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