CalSTRS' investment committee approved hiring RCLCO Real Estate Advisors as its new real estate consultant, the pension fund announced Thursday.
RCLCO replaces The Townsend Group, whose contract expires in February. Townsend and Pension Consulting Alliance were the other finalists. PCA serves as a general investment consultant for the $215.3 billion California State Teachers' Retirement System, WeTownsend Group, whose contract expires in February. Townsend and Pension Consulting Alliance were the other finalists. PCA serves as a general investment consultant for the $215.3 billion California State Teachers' Retirement System, West Sacramento.
Townsend has been CalSTRS' real estate consultant for the past nine years, but "during the interview process, RCLCO impressed upon us that they add perspectives from operators in the industry, which will incorporate fresh insights to future strategic and policy discussions," said Harry M. Keiley, investment committee chairman, in a news release. CalSTRS officials were not available to provide further details about the reasons for the hire.
RCLCO's contract is slated to begin in March and will run for a three-year term, with the option of a possible two-year extension.
CalSTRS issued an RFP in August for the real estate consultant as part of its normal due diligence. The pension fund has a $25.4 billion real estate portfolio.
The loss of CalSTRS is a major loss for the Townsend, a real estate investment and consulting firm. Townsend advises on around $178 billion in assets and the loss of the CalSTRS contract means a more than 14% decline in assets under advisement. In June, the $11.2 billion San Diego County Employees Retirement Association, terminated Townsend as its real estate consultant.
Joe Olszak, Townsend' chief operating officer, did not return phone calls seeking comment.
In September, Aon announced it was buying Townsend for $475 million. Townsend is majority owned by Colony NorthStar.