Let me put this delicately: IPERS is biting the hand that feeds it.

Last month, Iowa’s insurance industry chieftains and related luminaries gathered at the Hotel Fort Des Moines to pat each other’s backs over their newest $8.7 million contribution to the state’s venture capital fund.

The state’s insurers have delivered roughly $15 million toward their promise of providing $60 million over the next five years to the state’s newest and most promising companies. In return, the insurers got a nice break on the amount that the state taxes their insurance premiums.

The VC fund is for a good cause. Someone’s got to make sure that Iowa’s talented and idea-driven residents stick around. Money is a pretty good motivator. That it’s funded by private industry boost the chances it will actually be successful. That said, Iowa’s political leaders are sweating over chump change.

The Iowa Public Employees’ Retirement System, relative to the state’s other investment pools, is a $15 billion juggernaut. The fund, which handles pension plans for most of the state’s public employees, has about 40 percent of its money in bonds of some kind. The remainder is largely in stocks. Of the total, $880 million is dedicated to investments in private companies. That’s right, $880 million.

Of that $880 million, IPERS currently has $230,000 invested in two small, private Iowa companies, Ames-based CB/EM Holdings and Tubetech of Stockton. That’s 0.03 percent. Since 1985, IPERS has invested $6.3 million in 35 Iowa-based companies through its private placement investment arm, according to Kathy Comito, IPERS chief investment officer.

Besides the private placements, IPERS has plenty of money involved in Iowa. As of June 30, it had $46 million invested in Iowa-based companies and commercial property mortgages here. It has another $804 million invested in companies that have presence in Iowa.

That money is nice, but stalwart Iowa names such as Principal Financial Group Inc., Meredith Corp. or Maytag Corp. don’t need it. There are plenty of investors around the world willing to invest in those companies. The problem facing the Hawkeye State is that there aren’t enough folks willing to take a chance on lesser-known names.

Maybe the fault doesn’t lie entirely with IPERS. After all, the fund has chosen a Los Angeles-based money management firm called Pathway Capital Management LLC to handle its private placement investments. Pathway’s investment savants probably don’t make it out here very often.

Someone ought to send Pathway a plane ticket to Des Moines International. With $880 million to play with, I am sure that plenty of Iowa’s young chief executives would love to chat them up. Did I mention the $880 million?

Of course, there’s a catch. In this case, the sticking point is that IPERS isn’t in the business of helping Iowa. It’s out to help its members.

In that regard, IPERS appears to be doing its job swimmingly, with its portfolio losing only about 15 percent of its value from its peak. The drop includes a roughly $1 billion decline in its private placement investments over the last two years. Yes, that’s the part managed by the glamorous big-city firm that’s all but ignoring us. Pathway didn’t return phone calls seeking comment.

Maybe Iowa isn’t a good place to risk money on small companies. Do they fail at a greater rate than those in other states? No, they don’t. Iowa State University economist Ken Stone did some checking and found that Iowa ranks 49th in terms of new companies started. That’s dismal, but no surprise. It ranks 26th in terms of being home to companies that fail. That’s not so bad, and ought to warrant more than 0.03 percent.

The bottom line is that IPERS’ money ultimately comes from Iowa’s taxpayers. Those taxpayers would be well-served by having a few more successful companies around to give them jobs, create wealth and shoulder some of the tax burden. IPERS could beat the insurance industry’s five-year tax-break-funded $60 million venture capital fund without breaking a sweat.

Both Comito and Iowa Treasurer Michael Fitzgerald, who is a voting member of the IPERS board of trustees, say they give Iowa investments special consideration. If money talks, .03 percent isn’t saying much about IPERS’ faith in Iowa’s private companies.