Iowa issues direct lending RFP

The American pension fund could hire two or more managers to handle $200 million to $400 million in a US direct lending mandate.  

The Iowa Public Employees Retirement System has issued a request for proposals (RFP) for direct lending managers to handle a mandate of $200 million to $400 million. The pension could hire two or more managers if it finds suitable firms, the RFP said. Applications are due by 11 December.

The RFP says that the $27.8 billion pension fund is looking for US mid-market managers that invest predominantly in first lien senior loans to private companies with EBITDA between $5 million and $75 million.

Applying managers must have invested $500 million in first lien senior debt through prior funds or separate accounts before 30 September 2015. The applying firm should also have at least $500 million in assets under management and a verifiable track record of at least five years in private direct lending investments. If the track record from the current organization is less than five years, the pension would consider a supplemental track record from another organization where the same team may have worked on deals together.

The pension fund is conducting the search with the help of its advisor, Wilshire Associates, and the RFP is posted on Wilshire’s website.

After Iowa receives applications, it will interview finalists at its February 2016 investment board meeting. If necessary, Iowa’s investment staff and Wilshire will conduct on-site due diligence visits with the finalists also in February.

Final manager selection is expected to occur in March.