The California Public Employees’ Retirement System has chosen Meketa Investment Group to assume consulting services for the US pension’s $3.7 billion infrastructure programme.
CalPERS’ investment committee voted for Meketa to take over StepStone Group’s consulting contract – which expires on 29 February, 2020 – after the latter resigned earlier this month.
StepStone will begin infrastructure consulting for another undisclosed firm in October, according to agenda materials for the investment committee’s meeting. The materials did not state why StepStone was ending its contract two years early.
CalPERS had hired Meketa in March to assume private equity investment consulting services after Pension Consulting Alliance resigned from that contract. PCA, which is currently advising on CalPERS’ real estate investments, was considered to take on infrastructure consulting, as well.
The committee said in the meeting materials that this was an opportunity to reduce the “complexity and expense” of its consultants by aligning contract terms for infrastructure and real estate consultants. This would be in line with the pension’s plans to consolidate those portfolios, along with forestland, into a single real assets group.
But the committee declined to do so, voting to keep the infrastructure contract expiration date for February 2020.
A third option to issue a request for proposals for a new consultant never reached a vote because committee members feared the process would be costly and disrupt investment processes.
CalPERS announced plans to create a real assets programme in April that would be worth around $36 billion. Its infrastructure portfolio amounts to 1.2 percent of CalPERS’ total assets. It returned a net 9.92 percent last year, compared with 7.6 percent returned by real estate.