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Infrastructure

StepStone resigns as CalPERS’ infrastructure consultant; staff recommends new hire at meeting next week

CalPERS' investment committee could hire a new infrastructure consultant at its scheduled meeting on Sept. 18 following the resignation of its existing consultant, StepStone Group, shows agenda materials for the meeting.

It is unclear why StepStone resigned from its contract, and a spokeswoman for the consultant declined to comment.

The agenda materials include an Aug. 11 letter from Jason Ment, a partner and general counsel for StepStone, to investment committee Chairman Henry Jones confirming StepStone's resignation. The resignation had not been previously disclosed by CalPERS officials.

StepStone's contract started March 1, 2015, and did not expire until Feb. 29, 2020.

StepStone Group's resignation is effective Sept. 30 and investment staff is recommending that the investment committee act at the meeting to hire a new consultant that would start on Oct 1.

The infrastructure consultant offers independent fiduciary opinions on infrastructure investment decisions and CalPERS staff said in the agenda materials that "to minimize disruption to the investment process," it is recommending the investment committee bypass the RFP process.

It suggests that Meketa Investment Group, the board's infrastructure consultant from 2010 to 2014 and currently its private equity consultant, or Pension Consulting Alliance, its real estate consultant and backup general consultant, be chosen to replace StepStone.

The $333.3 billion California Public Employees' Retirement System, Sacramento, currently has $3.5 billion in infrastructure investments.

Megan White, a CalPERS spokeswoman, confirmed StepStone resigned, but did not comment further.