July 15, 2016

The recent editorial article in Pensions & Investments, "How hard to push? Plenty," (Subscription Required) does not accurately depict CalPERS' real estate consultant selection process.

The piece points out that only six firms responded to CalPERS' request for proposal. However, given the size and complexity of CalPERS' portfolio, it is reasonable that only a few firms were qualified to submit. The sheer size of our portfolio eliminates many smaller firms from consideration because they lack experience on a similar scale.

The article also does not state that CalPERS staff, with the CalPERS Board of Administration's involvement, conducted a thorough review of the technical qualifications of each of the six bidders. Once the review was complete, the pool of firms was reduced from six to the two remaining qualified firms. Again, it is not unreasonable for only two firms to be selected to advance to the final round considering the size and complexity of the portfolio.

The CalPERS Board made its decision based on a full review of all the material as well as the interviews it conducted with the finalists. In the end, the most qualified firm, Pension Consulting Alliance was selected.

CalPERS is committed to selecting the best consultants to ensure the overall health of the Fund.