R.I. hires new consultants for $8.4B pension fund

PROVIDENCE – A state commission has hired new investment consultants for the state’s $8.4 billion pension fund and has overhauled the investment consultant structure to split responsibilities among three firms.

R.I. General Treasurer Frank T. Caprio, the chairman of the State Investment Commission, said the change will give the state access to a range of services to better deal with the complexities in diversification and risk management.

Under the new structure, there will be three consultants with distinct responsibilities – a general policy and asset-allocation consultant, an implementation manager and a manager search consultant who will used on an assignment basis, according to a news release from Caprio’s office.

Caprio said it is expected the change will provide for better, less expensive, service.

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“This is a particularly challenging time for institutional investors and public pension funds and having quality consultants providing reliable insight and analysis is critically important,” said Caprio. “The new consulting structure will allow us to utilize the strengths of each of these firms to give the fund the highest quality service at the best value possible.”

The following consultants were hired by the commission last month:

• General policy consultant: Pension Consulting Alliance (PCA), a lead consultant to the California State Teachers’ Retirement System (CalSTERs, the second-largest U.S. pension fund) and other large funds. Caprio’s news release said industry polls and publications have consistently ranked PCA as one of the top ten largest consulting firms in the category of retainer client assets under advisement.

• Implementation manager: Russell Investment Group. As a top rated pension consultant in the category of assets under advisement, Russell is considered a pioneer in the pension universe and is the industry standard in beta overlay and exposure management, Caprio said.

• Manager search and database services: Brockhouse Cooper, which currently provides manager search and database services to two of the largest pension funds in the world: the Ontario Teachers Pension and ABP Investments. The extensive databases maintained by the firm, which covers both domestic and international managers, will allow state personnel to conduct far more in-depth manager searches than is currently possible, Caprio said.

News and information from the R.I. Office of the General Treasurer are available at www.treasury.ri.gov.

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