CalPERS’ investment advisor resigns

The US's largest public pension will engage Meketa, its real assets advisor, as its private equity consultant for the remainder of PCA’s contract period ending June 2020.

California Public Employees’ Retirement System is switching its private equity investment consultant from Pension Consulting Alliance to Meketa Investment Group.

According to materials for the pension’s 13 March investment committee meeting, PCA founder and managing director Allan Emkin wrote in a letter to CalPERS that PCA is resigning as the Sacramento-based pension’s private equity board investment consultant, effective 16 March. No reason was given for the resignation.

Meketa, which currently advises CalPERS on real assets investments, will replace PCA, pending staff approval of the investment committee’s recommendation.

PCA documents have previously outlined details of the Californian pension’s private equity fund portfolio sales, including its sale of 46 fund positions representing more than $2 billion during fiscal 2016 and the disposal of 26 funds in the second half of last year that generated gross proceeds of around $434 million.

CalPERS’ investment committee said in another meeting note that, if the role of the private equity consultant is unoccupied for any amount of time, the pension’s investment process could be “significantly and negatively impacted”. It added that such a vacancy could result in investment transaction delays that could affect the pension’s ability to achieve investment return objectives.

Meketa originally missed out on the private equity mandate when CalPERS ran its search in 2014. Both PCA and Meketa were finalists in the process, but PCA was eventually selected as the consultant on a five-year contract.

PCA’s private equity advisory services began on 1 July 2015 and was set to expire 30 June 2020.

If approved, Meketa would perform the services until that expiration date, costing CalPERS a prorated amount of $1.9 million, a third document for the 13 March meeting showed. That amount is approximately $200,000 more than PCA’s fees, CalPERS wrote in the materials.

According to the documents, PCA will continue as CalPERS’ real estate board investment consultant, secondary general pension consultant and the main advisor for issues relevant to the Responsible Contractor Policy.

“We want to thank PCA for their work and contributions on our private equity portfolio and look forward to continuing to work with them in their capacity as our real estate and secondary pension consultant,” a CalPERS spokeswoman wrote to sister publication Private Equity International.

Meketa will also remain as the real assets consultant, after previously having served as the infrastructure board investment consultant from January 2011 to February 2015.

PCA did not respond to further request for comment.