Searches and Hires

CalSTRS preps investment consultant search

CalSTRS' investment committee on Thursday approved launching a search for up to two general investment consultants sometime this fall.

Staff of the $228 billion West Sacramento-based California State Teachers' Retirement System are expected to divide the traditional general investment consultant services into two groups to allow the investment committee to hire two consultants if it so desires. A lead consultant would have all of the traditional general investment consultant duties, and a second, co-consultant would have full asset allocation study duties but a reduced regular consulting role.

The contracts of current general investment consultants Pension Consulting Alliance and Meketa Investment Group are set to expire on May 31, 2019. PCA has served as the CalSTRS' investment consultant for 30 years. Both firms are invited to rebid.

Finalists are expected to be invited to interview before the committee at the March 2019 meeting. The new consulting contracts will begin June 1.

In the past, CalSTRS has received a relatively small number of bidders for general investment consultant RFPs, with only four firms bidding in the last search, a staff report to the investment committee noted.

"In conversations with firms they often cite two key issues: the capacity limit of assuming an account the size and scope of CalSTRS; the second, and often mentioned concern, is the 30-plus-year tenure of the current lead general consultant," the report stated.

The RFP is expected to be posted on the pension plan's website.