CalPERS progresses in PE and infra consultant search

The $298bn pension fund could also be gearing up to sell its hedge fund assets on the secondaries market.

The California Public Employees’ Retirement System has narrowed its search for a private equity investment consultant and intends to select The StepStone Group as its infrastructure investment consultant, according to documents from its September board meeting.

CalPERS launched its private equity investment consultant search in July and received three proposals from Albourne America, Pension Consulting Alliance and the Meketa Investment Group. The pension scored each consultant based on its initial proposal, proposed fees and its interview with the board. A final decision will be made at the October board meeting. The private equity investment consultant won’t begin work until 30 June 2015, when Pension Consulting Alliance’s six-year term ends.

CalPERS intends to select The StepStone Group as its infrastructure investment consultant. Meketa Investment Group and Courtland Partners were also finalists for the consultant contract. CalPERS has worked with Meketa since December 2009. The board has renewed Meketa’s contract several times, but it will officially terminate on 1 March 2015.

The $289 billion pension fund hasn’t been active on the infrastructure secondaries market but on the private equity secondaries market it is looking to be an active buyer. In February, head of private equity Réal Desrochers told Secondaries Investor, CalPERS is looking for 2007, 2008 and 2009-vintage funds.

“The ideal thing we’re looking for is stakes from fund managers we already have in our portfolio. We know our portfolio well and try to leverage the knowledge we have so it’s easier to price [secondaries fund interests],” Desrochers said at the time.

CalPERS could also use the secondaries market to divest its hedge fund assets. At its September board meeting, the pension announced its plans to eliminate its hedge fund programme, in an effort to reduce complexity and costs in its investment portfolio. CalPERS plans to exit 24 hedge funds and six hedge fund of funds valued at roughly $4 billion over the next year, according to a statement.

A CalPERS spokesperson was unavailable to comment on secondaries activities by press time.