Ive never been to the La Jolla, Calif. headquarters of private equity consultant Pacific Corporate Group (I hear its quite gorgeous), but now imagine that somewhere in its luxurious bowels are compromising photos of public pension trustees.
How else to explain the fact that PCG is a finalist for new mandates from the Oregon Investment Council, The Fire & Police Pension Association of Colorado and the California Public Employees Retirement System? This is a firm that has proven itself unable to retain top talent, due to as refusal to more evenly share firm economics and control. Just five weeks ago (after PCG fired two top guns),I wrotethat any PCG clientsthat don’t issue new RFPs are either fools or already on vacation. Unfortunately, I assumed it was self-evident that such RFPs should not result in PCG being retained. Apparently I was wrong.
CalPERS seems to be seriously considering PCG for both a cleantech and emerging markets mandate, and is by far the least surprising PCG apologist. It is simply enormous, and employs just about every private equity consultant on the market. CalPERS not hiring PCG is like an elephant trying to avoid stepping on ants physics just mandate that its going to happen.
Likelihood of PCG win: 95%
Colorado Fire & Police has made PCG one of three finalists for its discretionary private equity mandate, alongside Hamilton Lane and Franklin Park (a pair of shops that dont have much love lost for one another). And its not like Colorado received only three proposals. In fact, it received more than ten. But I still get the sense PCGs finalist slot here is largely the result of existing mandate inertia, and that either Hamilton Lane or Franklin Park will win out (depending on how well Hamilton Lane makes its scale argument).
Likelihood of PCG win: 35%
Oregon is the real surprise, because it seemed genuinely pissed when its primary contract (Tara Blackburn) was one of three senior managers to leave last fall in a dispute over firm economics/control. And it didnt help matters when two more managers were fired in December. In fact, Oregon was so upset that it issued a brand new RFP, even though its current PCG contract doesnt expire until the end of 2007. In other words, sayonara.
But something funny happened during the RFP process: PCG became a finalist, alongside Hamilton Lane. Its a non-discretionary account, and apparently Oregon still liked the back-office number-crunchers and the notion that PCG knows the Oregon portfolio inside and out.
The Oregon board actually had been expected to make it selection this past Tuesday, but delayed the move because some board members wanted some additional info (and because one member was absent from the meeting). No formal selection date has been set, but April is most likely because the February agenda is jammed and there is no March meeting (OIC could, however, convene a special meeting in the interim).
Likelihood of PCG win: 55%