How IPERS Invests Its $43 Billion

By Steve Dinnen

A well-diversified portfolio is a work of art – a bold stroke of international equity here, a splash of fixed income there to make a canvas whose performance satisfies the eye of all who gaze upon it.

It’s quite a lot to pull off, though, and all the larger a task when $43 billion is at stake. But that’s the job given Gregory Samorajski (pictured), the CEO since mid-2020 of the Iowa Public Employee Retirement System.

IPERS has 170,000 government workers currently contributing to it, and 126,000 retirees depending on it to nurture all that money in a manner to fund their jubilee years. IPERS just finished a strong fiscal year, up 29.6%.

IPERS divvies up its money among nine assets classes, such as domestic equity (the largest portion, at 22% of the total portfolio), international equity (17.5%), all the way down to cash, at 1%. So this takes in stocks and bonds that we’re all familiar with. Further diversification comes with private equity, private real assets and private credit. In these areas, IPERS will place money with a smidgen of timber leases, a dab of venture capital, and some hard assets such as real estate (yes, it owns buildings), among others. At year end, there were 400-plus active investments within the private equity portfolio that an outside investment management firm had committed to on behalf of IPERS.

“We try to be in as many things as we can that we understand,” Samorajski said.

Iowa understands farms, so a pension plan that serves its government workers might be expected to include some working farms. That’s not as easy as it may seem. The asking price for some of these properties is just too high to merit a purchase.

IPERS has committed $150 million to UBS Farmland Investors. The market value of the investments made as of 3Q21 was $65 million. This $85 million gap is called dry powder – money committed but unspent. 

“Farmland is one area where it has been difficult to acquire properties, given the current pricing,” Samorajski said. In fact, he said the search for real assets is fairly difficult.

Individual investors may find this to be the case, as well. Or maybe with fewer dollars at stake they can slip in where a large institutional investor would find it difficult. Either way, they’re on their own – Samorajski isn’t giving out any advice on how to deploy your dry powder. He’s just looking for the proper diversification to keep IPERS on solid footing.

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