The Oregon Public Employees Retirement System and Massachusetts Pension Reserves Investment Management (MassPRIM) have each issued requests for proposals that could lead to the selection of new advisors for their alternative investment programs. They were expected to select new advisors as early as December.
The moves come after the two California pensions—the California State Teachers’ Retirement System and CalPERS—announced searches for investment managers to overhaul their alternative asset investment portfolios.
Oregon PERF appears to have finally lost faith in Pacific Corporate Group (PCG), which has advised the pension fund on private equity investments for more than 14 years. PCG has seen a number of senior executives leave over the years, including Managing Director Tara Blackburn, the director who worked most closely with Oregon PERF. Three directors who left around the same time handled some of PCG’s largest pension fund investors, such as the California Public Employees’ Retirement System and the New York State Common Retirement Fund.
“By virtue of the recent departures at PCG we felt it was necessary to go out and issue an RFP,” says Jay Fewel, a senior equity investment officer at the Oregon pension fund.
The Oregon PERF portfolio includes funds investing in buyouts, venture capital and special situations. The pension fund has a target allocation of 12% for alternative assets. As of the end of June, Oregon PERF had more than 139 funds in its portfolio, including 125 active funds, totaling more than $14 billion in committed capital.
MassPRIM seeks a new path
MassPRIM says it expects to enter into a three-year consulting agreement with the firm that wins its RFP process. The pension fund planned to take up the matter at its Dec. 5 board meeting. Pathway Capital is MassPRIM’s current alternative investment consultant. Pathway is moving away from the discretionary investment management that MassPRIM is seeking, and has informed the pension fund that it will not seek a renewal of its contract when it expires at the end of the year.
MassPRIM invests in buyouts, venture capital and special situation funds. It has a target allocation of 10% for alternative investments, not including real estate. Its actual allocation as of the end of July was 6.4 percent. As of the end of June, MassPRIM had committed more than $6.85 billion to 212 limited partnerships. —Matthew Sheahan