San Jose (Calif.) Federated City Employees Retirement System and San Jose Police & Fire Department Retirement Plan are searching for general investment consultants and absolute-return consultants, said Arn Andrews, chief investment officer.
The pension funds will issue an RFP within the next week or two because the contracts of the current consultants will expire June 30, Mr. Andrews said in a telephone interview.
NEPC is the $3 billion police and fire pension fund’s current consultant, and Meketa Investment Group is the $2 billion federated plan’s current consultant. Albourne America currently serves as both pension funds’ absolute-return consultant. All three firms are invited to rebid.
Mr. Andrews added that the RFP will also seek responses from managers that offer private equity “fund-of-one” customized separate account services. Both pension funds have targets of about 8% to 9% for private equity but are “chronically underallocated” at around 4%, Mr. Andrews said.
He added the request for responses is primarily for the pension funds to gain more information on the fund-of-one structure, and they might or might not hire managers to run those kinds of accounts.
The RFP will be posted on the city of San Jose’s procurement website on BidSync.
Separately, the pension funds hired Voya Investment Management to run $60 million for the police and fire plan and $55 million for the federated plan in a separately managed account utilizing three of the manager’s securitized credit strategies, Mr. Andrews said. It has exposure to securitized credit, commercial mortgages, and a mortgage-derivative hedge fund, he said.
The pension fund worked with Voya to create “a product we could be very fluid with,” Mr. Andrews said. Funding comes from rebalancing.