Iowa commits $373 mln through June

  • Iowa’s $3.5 bln private equity program is managed by Pathway
  • New commitments included five co-investments
  • Another six commitments expected to close soon

Iowa Public Employees’ Retirement System in the first half committed a little less than half the $800 million it planned to commit to private equity in 2017, according to documents Buyouts obtained through an open-records request.

Iowa had committed $373 million across seven fund commitments and five co-investments through June, according to a Pathway Capital Management report presented at Iowa’s June 22 board meeting. Pathway has managed Iowa’s PE program on a discretionary basis since 1993.

Another six funds and co-investments have been approved for investment and are expected to close soon, according to the report.

The reports did not disclose which funds received commitments in the first six months of the year.

Iowa had more than $2 billion of unfunded commitments through the separate account, according to a separate report presented at the pension’s June meeting. “We will continue to monitor and assess the amount of capital commitments that should be made going forward,” the report said.

The retirement system, and Pathway, noted similar concerns about the amount of dry powder currently available to private markets managers. Preqin recently pegged the amount of available investment capital for private equity and venture capital at around $842 billion as of March 31.

Even so, the Iowa report also noted the high-priced deal environment and widespread availability of debt financing was “not considered a concern,” according to the report.

Iowa PERS’s private equity program has netted a 14.1 percent internal rate of return since its inception more than 30 years ago, according to reports obtained by Buyouts through an open-records request.

Iowa’s PE program, valued at roughly $3.5 billion as of March 31, was underperforming its public-market benchmark by roughly 6 percentage points. The $30 billion retirement system uses the Wilshire 500 index plus 300 basis points as its benchmark.

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U.S. Democratic presidential nominee Hillary Clinton takes the stage at a campaign rally in Cedar Rapids, Iowa, on Oct. 28, 2016. Photo courtesy REUTERS/Brian Snyder