- Previous RFP collapsed after allegations at July 11 meeting
- Portfolio Advisors takes opportunity to clear the air
- “I’m hoping … we can put this behind us”: Board Member Ruiz
Los Angeles City Employees’ Retirement System formally extended its contract with private equity consultant Portfolio Advisorsfor one year.
The extension was approved at the board’s July 25 meeting, two weeks after retirement-system board member Nilza Serrano claimed the firm had misrepresented its track record in bidding for a new contract.
The events of the July 11 meeting, in which another board member criticized a competing bid from TorreyCove Capital Partners, forced the system to restart a request-for-proposal process that had already taken 10 months.
Neither firm had been present at the July 11 meeting, though TorreyCove President and CEO David Fann and Portfolio Advisors Managing Director Brian Murphy later defended their respective firms in statements to Buyouts and other publications.
Some of Serrano’s claims — among them that Portfolio Advisors had been fired from its contract with Pennsylvania Public School Employees’ Retirement System — were refuted by Murphy and other sources.
At the July 25 meeting, Murphy indicated that he was taken aback by the accusations and that he appreciated the ability to clear the air.
“I think you might have stepped over the line,” said Murphy, in a recording of the July 25 meeting. “It’s not fair, especially when we’re not here to defend ourselves.”
Serrano defended some of her earlier claims, adding that she’d done the best due diligence she could with the materials provided.
“I was given four pieces of paper to make my decision, and that’s how I made my decision,” Serrano said in the recording. “I take this seriously, I don’t want to be here just to be a butt on a seat.”
The July 11 meeting was tempestuous enough for LACERS to remove its audio recording of the events from its website. Like many California pension systems, the $15.3 billion retirement system typically makes recordings of its meetings available for public consumption.
In addition to extending its Portfolio Advisors contract, LACERS also directed its staff to deliver a timetable for launching a new RFP “with a significant education component,” one board member said in the July 25 recording. Portfolio Advisors was encouraged to make a bid on the new RFP, once it’s launched.
“I’m hoping at this point we can put this behind us and move on,” Board Member Cynthia Ruiz said during the meeting.
Action Item: For more information about LACERS, visit www.lacers.org/