At an investment board meeting held this week the Iowa Public Employees’ Retirement System (IPERS) conceptually approved a new allocation to a Man AHL managed catastrophe bond fund, as the pension looks to bring more absolute return strategies into its portfolio.The Iowa Public Employees’ Retirement System (IPERS) is the largest public retirement system pension fund in the state, with trust fund assets of almost US $47 billion.This pension fund has been adjusting its investment strategy and allocations, with a shift to what it calls a portable alpha strategy and new absolute return funds to allocate to have been part of a recent search.Having scored a series of investment managers a shortlist of three was created, one of which was Man AHL with its AHL Cat Bond Program that is managed by Man Group division AHL Partners LLP, part of the global independent alternative and active investment manager.

The AHL Cat Bond Program, which is a $1 billion plus catastrophe bond fund strategy that was incepted back in 2017, allocates its capital in the main to 144A cat bonds within the insurance-linked securities (ILS) asset class and has delivered an annualised absolute return of 9.5% over the five years to June 30th 2025, documents show.The IPERS investment board has conceptually approved the allocation to catastrophe bonds through the Man AHL strategy, approving the appointment and hiring of AHL Partners to manage a cat bond investment for the pension.This now moves the process to the next stage of on-site meetings and interviews.

Which means that the IPERS pension investment board has approved an allocation to cat bonds, approved hiring of a manager to deliver on the cat bond investment strategy, but there remain some due-diligence processes to complete before any allocation is made, it appears.It’s another signal of large institutional investors’ growing appetite for catastrophe bonds, as awareness of the relatively uncorrelated absolute return potential of insurance and reinsurance linked investments continues to build..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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