Archive for December, 2011

CalPERS Selects PCA as RE Consultant

Sunday, December 18th, 2011
They came, they presented, and they stayed.
Portland, Ore.-based Pension Consulting Alliance (PCA) will continue its two-year reign as the principal real estate investing consultant for America’s largest public pension fund, the California Public Employees’ Retirement System (CalPERS).
PCA has been the CalPERS Board of Administration’s real estate consultant since 2009, but the contract was up for competitive review earlier this year. The CalPERS Investment Committee made its selection after interviewing the top three finalists – PCA, Callan Associates Inc. and Courtland Partners Ltd – at its December meeting.
The committee awarded the contract to PCA subject to final negotiations and satisfaction of all contract requirements.
CalPERS has approximately $226 billion in assets, providing retirement benefits to more than 1.6 million State, public school, and local public agency employees, retirees, and their families, and health benefits to more than 1.3 million members. The average CalPERS pension is $2,220 per month.
“PCA has provided the Board with valuable insight over the past few years as our real estate staff has worked to restructure our portfolio,” said George Diehr, Chair of the Investment Committee and Vice President of the CalPERS Board. “We’re confident their experience will continue to help us evaluate and assess potential investment opportunities in the future.”
In February, the CalPERS Board adopted a new real estate strategy that focuses primarily on income-producing investments largely located in the United States. As of September 30, 2011, the market value of CalPERS real estate portfolio stood at $19.1 billion, up 26% from the same time a year ago.
“All the companies we interviewed for the role of Board real estate consultant had much to offer,” said Rob Feckner, President of the CalPERS Board. “PCA has shown they have the knowledge and skill to provide investment advice as we move forward with a strong, comprehensive real estate strategy.”
The new contract is scheduled to take effect April 1, 2012.
PCA and CalPERS’ other consultants certainly have their work cut out for them. California’s three largest pension systems have promised $500 billion beyond their current ability to make those payments to retirees, according to a study released last week by Stanford University Professor and former Democratic Assemblyman Joe Nation and a student researcher.
The Stanford Institute for Economic Policy Research issued the report, documenting what it claims is the state’s deepening pension crisis. California Common Sense, an organization dedicated to engaging the public in "data-driven discourse" is also behind the report.