CalPERS board postponed consideration of a $125 million senior housing mandate after Shattuck Hammond Partners came in with a last-minute proposal to save a contract that tentatively had been awarded to the firm. Last week, the $177 billion California Public Employees Retirement System staff had proposed switching the contract to Lend Lease Real Estate Investors because of problems encountered with Shattuck Hammonds current parent, PricewaterhouseCoopers. Now, Shattuck Hammond principals say the financial services advisory group will be separated from PwC no later than March 31, which eliminates a conflict of interest created because the firm is CalPERS board auditor.
Shattuck Hammond has agreed to provide the 5% co-investment that PwC originally was going to make. However, Sacramento-based CalPERS board members expressed serious concern at returning to Shattuck Hammond and possibly delaying the senior housing commitment for six months. In addition, CalPERS board members were unhappy that no Shattuck Hammond representative was present at Mondays meeting.
Separately, CalPERS board approved the hiring of CB Richard Ellis Investors to manage a $500 million real estate program that emphasizes the convergence of technology and real estate. The program is a joint project between CalPERS real estate and alternative investment staff. Also, CalPERS approved the creation of a $1 billion enhanced index fund that employs a market-neutral strategy. The fund will be managed internally.