CalPERS Staff Pushes for Quick Replacement of Infrastructure Consultant StepStone

Former infrastructure consultant, real estate consultant named as potential immediate replacements.

Following the August 11 resignation of its infrastructure consultant, StepStone Group, the California Public Employees’ Retirement System (CalPERS) investment committee may be on the verge of hiring a new consultant as early as its September 18 meeting, according to the meeting’s agenda materials.

It is unclear why StepStone split from the $333 billion CalPERS, which currently has $3.5 billion in infrastructure investments. StepStone was under a five-year contract, which started March 1, 2015, and would not expire until February 29, 2020. The resignation is effective September 30.

In the wake of StepStone’s withdrawal, CalPERS’ investment staff is pressuring the investment committee to hire a new consultant to start on October 1.

According to the agenda document, CalPERS is looking at two potential replacements: Meketa Investment Group or Pension Consulting Alliance (PCA).  Both are familiar with the  committee; PCA has been serving as the committee’s real estate consultant for seven years, while Meketa served as the committee’s infrastructure consultant from 2010 to 2014.

“Engaging Meketa or PCA through a new contract and/or letter of engagement, or using the existing Real Estate Consultant contract with PCA, would allow staff to expeditiously engage either vendor, avoid a lapse in services to the Committee, and provide continuity of services to the Committee from a known contractor,” the agenda letter reads. “Only Meketa and PCA have the resources, experience, and infrastructure expertise to assume the responsibilities without a disruption of services to the Committee.”

StepStone declined comment. CalPERS could not be reached for comment.

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