SACRAMENTO, Calif. — 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 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 billion private equity portfolio.
Currently in CalPERS' general consulting pool are Pension Consulting Alliance, Callan Associates, Mercer, R.V. Kuhns and Strategic Investment Solutions; their contracts expire June 30, 2009. All can rebid, said CalPERS spokesman Clark McKinley.
The RFPs require investment committee approval; the recommendations will be discussed at the committee's 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.
And CalPERS staff plans to renew the contracts of 23 international equity and fixed-income managers, which run a combined $19 billion, for one year, pending approval of the investment committee.
“We support the annual contract renewal recommendation as the current stable of (international equity) managers has outperformed since inception, and only slightly underperformed in the two most recent fiscal years,” Michael Schlachter, managing director at general investment consultant Wilshire Associates, wrote in a memo to Anne Stausboll, CalPERS' interim chief investment officer.
“The investment committee should be pleased with a program that outperformed overall for the year and renew all five managers' contracts for another year,” Mr. Schlachter, wrote about the fixed-income portfolio.
CalPERS' 18 international equity managers run a total of $14.3 billion; five international fixed-income managers handle a combined $4.72 billion. Genesis Investment Management LLP, London, the manager with the largest international equity portfolio, runs a $1.4 billion emerging markets strategy. The largest fixed-income manager is AllianceBernstein Holding LP, New York, which runs $1.3 billion in international fixed income.
CalPERS reported a return of -2.6% for the year ended June 30, slightly worse than the -2.4% loss staff predicted in July. The $117.7 billion global equities portfolio was the worst-performing asset class, with a total return of -11.4% vs. -10.2% for the custom benchmark, according to a Wilshire report. The private equity portfolio posted the strongest yearlong returns at 19.6%.