Iowa PERS To Possibly Replace Schroders
September 25, 2007
The $2.3 billion Iowa Public Employees' Retirement System (IPERS) recently discussed changes to its international equity portfolio that could lead to the replacement of a manager at the fund, CIO Karl Koch, told IMW.
Koch explained that the board looked at potentially restructuring its international equity portfolio at a Sept. 20 meeting.
"IPERS' international equity restructuring analysis was done to review the potential costs and benefits of utilizing core EAFE or core ACWI ex-U.S. managers versus the regional specialist manager structure we have now," Koch said. "The regional versus core decision was needed before IPERS could deal with underperformance issues in the international equity portfolio."
He said that once the structural decision was made, the board approved the issuance of an RFP for managers specializing in the Pacific Basin to possibly replace Schroder Investment Management North America on its $680 million account.
"Despite strong returns since inception, Schroders' Pacific Basin account performance has not met expectations the last few years, and IPERS will use the proposals received from the RFP process to determine if it should retain Schroders or replace them," he said.
Koch said that Schroders is allowed to rebid for the account, however it is unclear if the manager intends to attempt to retain the mandate. Calls to Schroders for comment were not returned by press time.
According to IPERS' Web site, the plan's international equity allocation consists of 16% of its total assets.
Koch said that the RFP would be available in early October on the plan's Web site at ipers.org/ipers_central/rfps/index.html.
Wilshire Associates serves as IPERS consultant.
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