Last week The Washington State Investment Board was scheduled to vote on a recommendation that it select Capital Dynamics as its next private equity consultant. If approved, the move would be a major loss for La Jolla, Calif.-based Pacific Corporate Group, which has served as WSIB’s private equity consultant for the past five years.
A spokeswoman for WSIB confirmed that Capital Dynamics had been recommended during a June 2 meeting of the system’s Private Markets Group, but declined to provide any historical context as to the likelihood of ratification. A placement agent familiar with WSIB, however, said that while he expects Capital Dynamics to be approved, the procedure is rarely a rubber stamp. “Politics often comes into play at some of the Northwest pensions, but I don’t know that PCG has enough contacts to reverse the momentum toward Capital Dynamics,” he explained. “But someone else who responded to the RFP [request for proposals] may have enough pull.”
None of the respondents were scheduled to appear before the full board last Thursday.
WSIB issued its RFP with the specification that it was looking for a non-discretionary consultant that would make investment recommendations. Proposals were due by March 25, while on-site visits and video interviews occurred between April 25 and May 13. WSIB is not releasing the identities of respondents, although PCG is known to have applied.
WSIB has committed $15.27 billion to private equity since its program began (including a whopping $4.2 billion to Kohlberg Kravis Roberts & Co., or KKR-affiliated deals), and plans to commit another $6.5 billion over the next five years. It recently has made commitments to new funds from Elevation Partners, Warburg Pincus and JPMorgan Partners.
Capital Dynamics has offices in both New York and Switzerland, and purchased Westport Private Equity Ltd. from Man Group PLC earlier this year. It currently has over $5 billion in assets under management.
Pacific Corporate Group, meanwhile, has provided investment and advisory services totaling more than $21 billion in private equity investment allocations on behalf of institutional investors. The firm also runs PCG Capital Partners, which manages two direct investment vehicles, a growth capital fund and a co-investment fund.