Rhode Island hires Cliffwater for private equity

Pacific Corporate Group Asset Management formerly worked as the private equity consultant for the $7.9bn Rhode Island Public Employees' Retirement System.

Rhode Island’s State Investment Commission has hired Cliffwater as the private equity consultant for the state workers' pension after a months-long competitive process, according to several people with knowledge of the situation.

Cliffwater beat out the system’s current private equity consultant, Pacific Corporate Group Asset Management, and Hamilton Lane for the contract. The commission voted on the hiring at its public meeting earlier this month.

The contract Cliffwater presented to the commission included fees of $400,000 for non-discretionary services, and $700,000 for discretionary services, according to minutes from a September commission meeting.

It’s unclear if the terms of the contract have changed from what the firm originally presented to the investment commission. It's also unclear how long the contract runs or if the contract includes anything beyond private equity like hedge funds.

Cliffwater declined to comment. Rhode Island declined to provide information about the decision to hire Cliffwater, which occurred at a public meeting. A spokesperson with the Rhode Island Treasurer's office said staff is preparing materials to answer a Freedom of Information Act request submitted by Private Equity International about the decision to hire Cliffwater.

Cliffwater overall has 26 clients for which it provides alternative investment consulting services, including hedge fund investments as well as private equity. The California-based group also works with the Maine Public Employees Retirement System and the Sacramento County Employees’ Retirement System.

For PCG AM, the loss of the Rhode Island contract is another in a series of blows that included the loss last year of its consulting contract with the California Public Employees’ Retirement System. CalPERS did not renew PCG AM’s consultant contract after it expired in June.

In September, CalPERS announced it was severing its more than 20-year relationship with PCG. PCG AM has been relatively separate from the parent organisation PCG. In 2007, the company was broken into three business units as part of a restructuring. PCG AM is led by David Fann, though PCG chief executive officer Christopher Bower serves on PCG AM’s board.

PCG AM also lost its private equity consulting contract with the New York City Teachers’ Retirement System last year to Hamilton Lane. The group has consulting contracts with the Illinois Teachers’ Retirement System, the Oregon Investment Council and several New York City pensions.

PCG did not return calls and emails for comment.