San Diego seeks infrastructure consultant

The $5.1bn San Diego City Employees’ Retirement System is searching for a consultant to roll out its 3% allocation to infrastructure, which translates to about $150m for the asset class.

The San Diego City Employees’ Retirement System (SDCERS) is searching for a consultant to help it implement an infrastructure allocation, targeted at 3 percent, according to a senior executive at the $5.1 billion pension.

SDCERS chief investment officer Liza Crisafi said she is hoping to recommend a consultant to the pension’s investment committee at its 7 July meeting and an 8 July board meeting. She said the consultant search is going on now and would result in the pension hiring an advisor to help it build out its infrastructure allocation.

In May 2010, the pension hired Chicago-based consulting firm Ennis, Knupp & Associates – now known as Hewitt EnnisKnupp – to evaluate its portfolio and determine whether its asset mix was appropriate. Hewitt EnnisKnupp eventually recommended, and the pension’s board approved, a new asset allocation which included an allocation to infrastructure, targeted at 3 percent.

Crisafi said the new infrastructure allocation translates to about $150 million the pension could commit to infrastructure, though there is no timetable for meeting the allocation.

“It depends on what’s happening in the market. We’re not set on any pacing schedule. It just depends on availability of deals,” she said. Crisafi cited diversification, the potential for good returns and asset-liability matching as three characteristics the pension sought out in infrastructure.

The pension already had a 5 percent allocation to private equity and 11 percent to real estate, which remained unchanged under the new asset allocation approved last year. San Diego City Employees established its private equity allocation in 2007 and has committed to firms like Alchemy Partners and Avista Capital Partners. The pension uses Credit Suisse and StepStone Group as its private equity advisors.