Firms & Funds

Iowa to commit up to $700 mln in PE in 2019

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Iowa, Iowa Public Employees' Retirement System, private equity, Pathway Capital, pension fund
Voters head to the polls for the U.S. presidential election in a one-room schoolhouse near Colo, Iowa, on Nov. 8, 2016. REUTERS/Scott Morgan
  • AUM: $32.3 bln
  • PE Target Allocation: 11 pct/actual 13.9 pct
  • PE investment advisor: Pathway Capital Management
  • Whom to contact: Melinda Mcelroy, melinda.mcelroy@ipers.org

Iowa Public Employees’ Retirement System at its March meeting authorized Pathway Capital Management, its sole PE manager, to commit up to $700 million to the asset class for 2019, an investment-board meeting agenda shows.

Pathway has already pledged more than a third ($263 million) of the allotted fund to Pathway Private Equity Fund XXV, IPERS Chief Investment Officer Karl Koch told Buyouts.

“Pathway has discretion to commit to partnerships within broad guidelines,” Koch said.

Iowa doesn’t have a pacing requirement and Pathway doesn’t have to “deploy the full $700 million if quality funds are not available,” Koch said. But Pathway can request additional funds later in the year if it finds worthwhile partnerships, he added.

“IPERS’s objective is to invest opportunistically in the highest quality partnerships available each year,” Koch said.

Pathway Capital’s flagship fund has a $2.3 billion target, per an SEC filing.

PE for fiscal 2018 performed well for Iowa, becoming the highest-returning asset class for the system at 18.92 percent, according to its Comprehensive Annual Report.

Iowa’s PE allocation sits at 13.94 percent, or $4.5 billion, exceeding its target of 11 percent, documents show.