Iowa receives $215M in  recovered IPERS funds

DES MOINES (AP) ? More than $215 million in Iowa public employee retirement funds recovered after being frozen in a New York investment fraud case have been transferred to the state, Iowa Attorney General Tom Miller announced Thursday.

The money was part of the Iowa Public Employee Retirement System?s investment Westridge Capital Management in 2007 and 2008. Two of the investment group?s managers were indicted in 2009 on charges of misappropriating institutional investor capital in connection with the $1.3 billion scam. One has pleaded guilty and awaits sentencing. The other awaits trial.

IPERS terminated its agreement with Westridge Capital in 2009. The $215 million recovered for Iowa is about 85 percent of the state?s total investment in Westridge Capital.

?This is a significant portion of IPER?s investment,? Miller said in a statement. ?Considering the scope of this alleged investment scheme, it?s good news that we were able to recover this amount.?

Miller said the state will continue to pursue additional funds.

The amount the state invested with Westridge Capital amounted to 2 percent of fund?s portfolio, which totaled $18 billion in 2009, officials said.

IPERS has more than 300,000 members.

After the investment managers were charged, a federal judge in New York ordered a court-appointed receiver to collect and distribute $815 million of recovered assets to dozens of investors, including IPERS.

The investment managers ran Santa Barbara, Calif.-based Westridge Capital and Greenwich, Conn.-based WG Trading Company LP.

IPERS had more than $496 million invested in Westridge Capital. The economic downturn in 2008 left the investment?s value at about $290 million.

State Treasurer Michael Fitzgerald expects the remaining 15 percent of the state?s investment will be recovered. If not, he said it would have no impact at all on the state?s retirees or the retirement fund.

?It?s just a downward dip,? he said. ?On a bad day on the stock market we lose more than what we?re talking about here. IPERS is on solid ground and this just makes it even stronger.?