CalPERS to consider consultants for general fund, PE and other strategies

CalPERS ranks Wilshire as the top candidate for both its general fund and private equity program as the nation’s largest pension system continues its PE overhaul.

California Public Employees’ Retirement System will select consultants for its general pension fund and several investment categories including private equity at an upcoming meeting.

The nation’s largest retirement system is overhauling its private equity program. CalPERS is ramping up its allocation to private equity, has hired a new director of private equity and has indicated its intent to step up direct investing and lending efforts.

A CalPERS subcommittee will convene on April 19 to award contracts to consultants for its general investment fund plus its private equity, private debt, real estate and infrastructure programs. The subcommittee will first interview candidates for these positions before making its decisions, according to board documents.

Buyouts reviewed the documents.

CalPERS issued an RFP in January for consultant roles, according to the board documents.

An internal team assigned a preliminary score for each applicant for each position prior to the subcommittee meeting. These internal scores were based on their fee proposals plus incentive points for committing to subcontract a portion of its business to firms owned by one or more disabled veterans (DVBE), according to the documents.

According to the documents, the subcommittee will give each consultant a score for how well representatives performed in their interview. The firm with the highest combined interview and preliminary scores will be awarded the contract for each respective category, pending final negotiations.

The preliminary scores indicate that Wilshire Associates, the current consultant for the general fund, leads the four applicants for that category. The other applicants are RVK, Verus and Meketa.

According to the documents, RVK was the lowest bidder, proposing $13.25 million in fees over a five-year period. However, Wilshire has the highest preliminary score as it proposed $14.75 million fees and received bonus points as the only firm committing to DVBE subcontracting.

Verus proposed $15 million in fees while Meketa offered $16 million, according to the documents.

Only Meketa, CalPERS’s current private equity consultant, and Wilshire offered bids to be CalPERS’s private equity consultant.

Wilshire has the top preliminary score between the two by offering $3.37 million in fees over five years while also earning bonus points for its DVBE commitment. Meketa proposed $3.5 million in fees, the document said.