UNITED STATES - California State Teachers Retirement System is planning to hire a new real estate consultant for the first time in 10 years.
The pension fund has employed Pension Consulting Alliance as its real estate consultant since January 1997 but that contract is due to expire at the end of this year.
CalSTRS had, in the past, allowed PCA to work as both its real estate consultant and as an independent fiduciary on some of its real estate decisions.
However, the pension fund recently decided it would no longer allow this to happen as it was concerned about a conflict of interest, so giving PCA the option to choose which role it would hold, the consultant will remain as its independent fiduciary.
CalSTRS uses several companies as independent fiduciaries to analyze and make recommendations on certain real estate investments. These include firms like Westwood Consulting, Courtland Partners, Bard Consulting and David Bonuccelli & Associates.
Officials at the pension fund say they do not want its real estate consultant - which monitors and comments on real estate performance and policy - to also perform reviews in the analysis of some specific real estate investments.
It's a move CalSTRS has applied to other asset classes including the alternatives asset class.
A final decision on the real estate consultant selection is expected in January 2008.
But pension fund real estate experts are predicting the firms interested in being CalSTRS' next real estate consultant will include The Townsend Group and ORG Real Property.
At the end of July, CalSTRS had a real estate portfolio value at $16.4bn (€10.5bn) - approximately 10% of its total assets of $169bn.