CalPERS seeks real estate consultants

CalPERS is seeking consulting firms for a dedicated real estate Spring-fed pool, the first competitive selection process since 2003, with five-year contracts to begin in
July next year.

In January this year the $181 billion fund re-engaged Pension Consulting Alliance as its primary real estate consultant, using the general pension consultant Spring-fed pool. It will retain PCA as its primary consultant but is seeking a list of outside consulting firms to serve as independent fiduciaries for the global real estate
unit.

These special project consultants assist CalPERS staff in issues such as due diligence, research reports and consulting advice.

With more than 25 managers and partners in the asset class, funds are spread across a variety of sectors including apartments, industrial, retail, and office, as well as investments in California urban real
estate, single family housing, agriculture and discretionary mortgage.

The fund has a strategic benchmark of 10 per cent to real estate and as at June had 9.8 per cent, or $17.8
billion, allocated.

In the financial year ended June 2009, real estate was the worst performing asset class for CalPERS with
a -35.8 per cent return for the year, with a long term expected annual return for the
asset class of 6 per cent.

The total fund returned -23.4 per cent for the year.