The pair of advisors are charged with helping the $4.4 billion pension fund develop a diversified, global private equity portfolio with a 5 percent target allocation. The RFP, issued June 30, drew 63 responses.
Expect San Diego to pledge about $100 million to the asset class every year, with each firm overseeing roughly half the mandate. Before anything can be spent, however, the advisors need to come up with an investment plan, which they will construct during the first six months of the year and which could entail hiring additional specialist firms from among the original 63 respondents. Beyond creating the plan, the exact duties of Credit Suisse and StepStone Group have yet to be determined.
“We believe Credit Suisse and StepStone are both outstanding private equity advisors and investors,” said Corey Buuhoan, investment officer and head of private equity. “They fit exactly what [we were] looking for and the particular needs of our program. They also compliment each other well, with StepStone being a small, local boutique here, and Credit Suisse being a large financial institution based in New York. We expect that both firms are able to handle all aspects of our private equity program.”
San Diego based its decision on three main criteria. It wanted to hire firms that could provide a customized portfolio; that focus exclusively on private equity; and that have a history of working very collaboratively with pension fund staffs.
Credit Suisse Customized Fund Investment Group manages commitments to private equity funds and co-investments, both in the U.S. and overseas. StepStone Group provides asset management, consulting and advisory services.