CalPERS flooded with consultant RFPs after changes to wish-list

CalPERS has received 17 applications in response to its RFP for a general pension consultant services spring-fed pool – four times the applications of its last review – and will select consultants during its April 20 investment
committee meeting.

Since the last review in 2004, CalPERs made a series of changes to the consultant requirements, including the development of six service areas to increase the potential of receiving proposals from a higher number of firms in various investment specialties, revising the minimum qualifications of operating history and the experience of key personnel in providing consultant services to institutional funds clients.

There has been $1.2 million budgeted to spend on the consultants annually, but until the composition of the pool has been determined, the costs are not final.

Staff will present the ranked list of successful proposers for the committee review at the March 16 meeting, and a decision will be made the following month.

The $174.2 billion fund held an investment committee meeting last Tuesday with agenda items including an asset allocation review in the first half of 2009.

CalPERS set its new asset allocation on December 15, 2008, with policy targets to be implemented over a period of three to four years.

It changed its global equities allocation from 60 to 56 per cent and increased the private equity allocation from 6 to 10 per cent.

Global fixed income was also decreased, from 26 to 19 per cent, and inflation linked assets increased from an old policy target of 0 to 5 per cent.

Real estate targets increased from 8 to 10 per cent, while cash remained at the zero target allocation.

Among other things the committee was due to discuss were recommendations by consultant Wilshire to add two growth managers, rumoured to include Martin Currie and OFI Institutional Asset Management, one global core manager as well as two emerging markets managers. Any changes are yet to be confirmed.

It is expected that CalPERS will increase the amount of money managed internally, as its own managers have done well compared with external managers.