CalPERS scouting for actuarial firm, hires 3 consultants

CalPERS’ board approved the release of an RFP for an outside actuarial firm to review the work of the CalPERS actuarial staff and to certify that such work satisfies actuarial professional standards.

The contract of the incumbent Buck Consultants is set to expire in March. The RFP is expected to be released Feb. 1.

Separately on Wednesday, the board also approved entering into new consulting contracts with Bard Consulting, Crosswater Advisors and Callan.

The three firms are part of a pool formed as a result of an RFP released in January 2019. The new pool started July 1.

The process is designed to save the $428.4 billion California Public Employees’ Retirement System, Sacramento, time by contracting with several firms at once and then using firms when projects are identified through a letter of engagement. Board approval is required when there is a large increase in work and each firm’s collective letters of engagement reach or exceed $1 million in fees

According to a separate report to the investment committee, Bard received letters of engagement for fee restructuring, life-sciences and residential monitoring projects for its real assets portfolio. Crosswater received a letter of engagement for a U.S. timberland disposition. Callan received a letter of engagement for due diligence on a private equity portfolio called Project Redwood. CalPERS declined to provide information beyond the report.

Separately, the board also approved sponsoring a California bill that would keep confidential certain information regarding private debt investments managed in-house by CalPERS. Unlike a similar bill that failed to pass in the last legislative session, the bill does not also apply to the $257.9 billion California State Teachers’ Retirement System, West Sacramento, or the $70.2 billion University of California Board of Regents.

Under the proposed legislation, CalPERS would be allowed to keep secret proprietary due diligence materials, not only to CalPERS but also to any participating underwriting syndicate, borrower, or the borrower’s owners or guarantors, and private loan agreements.

Also during the board meeting, CalPERS CEO Marcie Frost reported on CalPERS’ ongoing recruitment of a new CIO following former CIO Yu “Ben” Meng’s resignation in August. The goal is to have CalPERS’ new CIO in place early next year, Ms. Frost said. Interviews will begin the first week of December, she said. Korn Ferry is assisting.