Return to search

Seattle pension seeks infra investment manager

The Seattle City Employees Retirement System plans to commit up to $70m to infrastructure through one or more funds.

The Seattle City Employees Retirement System (SCERS) has issued a request for proposals (RFP) as it seeks a firm to manage infrastructure investments on its behalf as part of a new asset allocation policy.

The pension plans to commit between $50 million and $70 million to infrastructure investments through one or more funds, according to RFP documents.

SCERS is accepting proposals from investment firms to manage open- and closed-ended infrastructure funds for its  $2.3 billion defined benefit pension programme. Firms may apply to manage one or both types of vehicles, and interested US, non-US and global contenders will all be considered in the RFP. Submissions must be received by Friday, June 5, in order to qualify.

According the RFP, which is being managed by independent full-service investment consultancy NEPC, qualifying teams should have five years' experience managing infrastructure strategies, must be in the process of raising more than $100 million with a final close of no earlier than October 31, and must currently oversee at least $300 million in assets under management (AUM).

Through a question and answer session, NEPC elaborated that while qualified teams must have five years' experience managing infrastructure investments, that experience does not necessarily have to have been gained while employed by the submitting teams' current firm. Further clarification also came to light that the $300 million benchmark should only include actual AUM, not committed capital.

SCER was founded in 1927 and established in 1929. It currently serves about 10,400 active members and 5,000 retired employee members. The pension is led by a seven-member board of administration and an executive director appointed by the board. The current interim executive director is Kenneth J. Nkatsu. 

As of December 31, 2014, the pension had a target allocation of roughly 1.7 percent to private equity investments, with 10.6 percent earmarked for real estate investments. 

After a March presentation by Don Stracke and Mark Cintolo of NEPC to the board of administration regarding potential investment pathways, in April the board unanimously approved an alternate allocation mix calling for 3 percent of the fund to be invested in infrastructure-related assets, with an additional target of 9 percent for private equity and 12 percent for real estate investments. 

According to April 2015 board meeting minutes, this asset allocation policy was passed unanimously by a 5-0 vote. It is set to become effective on July 1, 2015.