The California Public Employees’ Retirement System is looking for law firms help it make and exit investments, according to a request for proposals on its website.
The pension fund, which has $27 billion of private equity assets, is seeking between five and 10 law firms to advise it in “work-out” situations for its older funds, the RFP notes. The firms will also offer legal advice on investing in funds, and making co-investments and direct investments. This includes law firms with experience of buying or selling fund interests on the secondaries market.
“Work-out” situations include instances of general partner under-performance, key-person events, or breaches of contract or fiduciary duty, the RFP notes.
The successful firms would work across the pension’s private equity, infrastructure, trust level portfolio management and opportunistic strategies asset classes.
The ideal candidate will be familiar with the terms and concepts found in private equity partnership and limited liability agreements, have experience outside of private equity, including in hedge and credit funds, and be experienced enough to act as lead negotiators on CalPERS contracts.
“Additionally, CalPERS is interested in ideas to combat the excessive complexity found in private fund legal documents,” it added. “Finally, CalPERS is interested in new and realistic ideas to increase the alignment of interests between CalPERS and its investment partners.”
CalPERS’ current counsel contracts expire 31 December 2018. The new contracts will be for a five-year term beginning 1 January 2019.
Infrastructure was CalPERS’ top-performing asset class this year with net returns of 20.6 percent – exceeding the benchmark by 14.16 percentage points – over the past 12 months ending on June 30.