Thursday, May 26, 2016
Investment Committee approves supplemental $100 million commitment for European
private lending strategy with Cross Ocean
At its regular meeting on Wednesday, May 25, 2016, the Investment Committee approved a supplemental commitment of $100 million U.S. Dollars to Cross Ocean Partners ESS Fund II (European Private Lending).
In 2015, Chief Investment Officer Girard Miller issued an RFP for non-US direct lending, for which numerous competitive responses were reviewed, and several firms were selected. In that group, the Committee approved in November 2015 a $100 million commitment to incumbent manager Cross Ocean Partners. OCERS completed its final due diligence and contract negotiations for this fund earlier this year, in time for their first close. The NEPC pacing plan for direct lending showed a $400 million capacity for new commitments in 2016, and OCERS has made commitments of $210 million against that schedule this year.
OCERS releases Exploratory RFP for Alternative Income strategies
selects Meketa as general consultant, with Pension Consulting Alliance in backup
In other action, the OCERS Investment Committee provisionally selected Meketa Investment Group as the apparently successful bidder for a five-year engagement as its general investment consultant. The committee has named Pension Consulting Alliance as the designated backup finalist in the event contract negotiations are not completed satisfactorily.
The selection process remains subject to final contract negotiations, and culminates a four month search process that is required periodically under OCERS' service provider policy. Six prominent qualified competing firms (not to be identified until the contract negotiations are completed and our Quiet Period terminates) submitted responses to the extensive RFP; the two finalists selected by the committee's consultant selection steering committee were Meketa and Pension Consulting Alliance. NEPC has been the incumbent since 2011 and is expected to complete its engagement following next month's Investment Committee meeting.
No further details are available from OCERS at this time, pending completion of our ongoing negotiations, and the termination of our Quiet Period.
Watch list and
portfolio surveillance update
OCERS' Investment Committee followed a staff recommendation and voted to place EnerVest on watch. EnerVest is an incumbent oil and gas exploration company in which OCERS has made three investments (Fund XII, XIII, and XIV, in 2010, 2013 and 2015, respectively).
Portfolio Report update
Additionally, the Investment Committee received an update about OCERS' preliminary fund performance as of April 30, 2016. The CIO, Girard Miller, reported that OCERS' total fund recorded a 1.00 percent increase in the month of April. OCERS has a year-to-date positive return of 1.70 percent. OCERS reported a one-year return of -2.01 percent as of that date, and a trailing five-year return of 4.78 percent. For the trailing 7-year span, OCERS' recorded a strong 8.51 percent.
As of April 30, 2016, OCERS' total fund was more than $12.6 billion.
OCERS' Board of Retirement will hold its next regular meeting at 9 a.m. on Wednesday, June 22, 2016; the next Investment Committee meeting will be held at 9 a.m. on Wednesday, June 29, 2016.