The California Public Employees’ Retirement System (CalPERS) has unanimously voted to name Meketa its interim private equity consultant until June 2020.
The Sacramento-based pension’s board approved the resignation of its private equity consultant Pension Consulting Alliance (PCA), and replace it with Meketa for the remaining contract period at its 13 March meeting.
CalPERS chief operating investment officer Wylie Tollette said during the meeting that Meketa’s takeover for the rest of the contracted period would cost the pension approximately $235,000 more than the existing structure with PCA would have cost.
“Meketa was unwilling to negotiate the fee,” Tollette said, noting that the new prorated contract value of $1.9 million to be paid to Meketa was the original price it offered during an advisor selection process that CalPERS ran in 2014. He added Meketa told the pension that, if the fees are revisited now, they would be even higher than the original price. “They thought this was a reasonable fee.”
Meketa originally missed out on the private equity mandate, after becoming a finalist alongside PCA in the 2014 search process, as reported by Private Equity International. PCA was eventually selected as the consultant on a five-year contract from July 2015 to June 2020.
PCA managing director Allan Emkin wrote in a letter to CalPERS earlier this month that the consultant is resigning as the private equity investment advisor, effective 16 March.
No reason was given for the resignation to-date.
Meketa will continue advising CalPERS on real assets investments, while PCA remains the pension’s real estate and secondaries investment consultant.