CalPERS is considering issuing RFPs for general consultants to refresh its backup stable and for a specialty private equity consultant.
“The investment program has changed in scale and complexity since 2003, when the last RFP for general pension consulting services was conducted,” staff at the $232.1 billion California Public Employees’ Retirement System, Sacramento, wrote in a memo to the investment committee. Staff will search for general consultants and may ask them to provide specific services, including investment analysis and research, strategic analysis, organizational and structural analysis among others. The private equity consultant would offer advice on the $25.3 billion private equity portfolio.
Currently in CalPERS’ general consulting pool are PCA, Callan, Mercer, R.V. Kuhns and Strategic Investment Solutions; their contracts expire June 30, 2009. All can rebid, said Clark McKinley, CalPERS spokesman.
The RFPs require investment committee approval; the recommendations will be discussed at the Sept. 15 meeting. The search does not affect general consultant Wilshire Associates.
Also on Sept. 15, the committee will vote on adding real estate consultants David L. Bonuccelli & Associates, PCA and Stockbridge Capital Group to a group of 14 existing real estate consultants for special projects. The firms all responded to an RFP issued June 25.
Separately, Wilshire is recommending CalPERS add managers that specialize in small-cap, midcap, and smidcap equities to its roster of domestic equity managers, to move away from the large-cap bias currently in the external domestic equity portfolio, according to a letter from Wilshire to staff.
The letter is in response to a staff review of CalPERS’ $6.4 billion external domestic equity portfolio, which underperformed its benchmark by 151 basis points for the year ended June 30.
However, staff is recommending the investment committee renew the contracts of the fund’s 12 domestic equity managers for one year. CalPERS staff will still have the ability to terminate managers throughout the year if they underperform.
