CalPERS seeks to refresh its pool of investment consultants

  • Why this is important: Enables CalPERS to refresh all consulting contracts at once rather than issuing four separate RFPs
  • AUM: $354 bln
  • General investment, PE contracts expire next year
  • Real estate consulting contract to be replaced early
  • Proposals due by April 30

California Public Employees’ Retirement Plan published a request for proposals for investment consultants, seeking bids for general investment services and three specialized private-markets asset classes.

The new contracts would begin in July 2020 and would enable CalPERS to refresh all its consulting contracts at once rather than issuing four separate RFPs on differing timelines. The $354 billion retirement system has said it can cut down on paperwork and vetting burdens by evaluating potential partners at one time.

CalPERS plans to hire consultants for general pension investment, PE real estate and infrastructure. CalPERS may pick one firm to handle the private-markets consulting; the general investment consultant will be stand-alone, according to the RFP.

CalPERS uses Meketa as consultant for PE and infrastructure investing at $693,000 per year. Wilshire is its general investment consultant at $3.15 million per year. Pension Consulting Alliance provides real assets and backup general investment consulting for $1.35 million a year.

Meketa’s and Wilshire’s contracts expire in June 2020, while Pension Consulting Alliance’s real estate contract expires March 31, 2022.

Completed proposals are due by April 30, but applicants should notify CalPERS of their intent to bid by April 16, the RFP says. CalPERS will host a bidder’s conference on March 21, and prospective bidders will have until March 22 to submit written questions.

CalPERS expects to select finalists in June and decide in August after interviews.

The new contracts will be for a period of three years, starting July 1, 2020, with options to extend them for up to two years. CalPERS will have the right to terminate the contracts at its own discretion, for any reason, according to the proposed contract attached to the RFP.

Action Item: Read CalPERS’ RFP here