Tacoma rehires Wilshire after'unimpressive' consultant search | With Intelligence

Tacoma rehires Wilshire after ‘unimpressive’ consultant search .

Stacey Potts

17FEB2022

The Tacoma Employees Retirement System is sticking with a familiar face as it rehired Wilshire Associates to supervise its investment portfolio. 

The $2.1bn investor agreed to re-up with its current consultant over finalists Callan and Meketa Investment Group. 

The allocator was left “unimpressed” by the two challengers, noting they did not bring in a fresh enough perspective to warrant a change.

“I think that we have had a great experience thus far and it’s going to continue with Wilshire,” said Kevin Boeh, a member of the allocator’s investment advisory committee.

“I was sort of unimpressed with the last candidate’s ability to bring more technical prowess,”Boeh added.

Fees were also a consideration: “I didn’t see enough differentiation from either of the two alternatives to warrant the transition cost of making a change,” added Michael Thomas, an investment adviser at Tacoma.

While Tacoma does not have a dedicated private credit allocation, it flagged its overweight private equity stream during the search process, suggesting that an asset-liability study and manager search could be on its radar.

Wilshire also touched upon its continued interest in holding a large overweight in alternatives and non-traditional fixed income versus traditional FI. It recommends clients look to alternative FI streams given the “rich valuation of government bonds and significant compression in credit
spread over the past year.”

The consultant manages a number of clients with private credit strategies. They include Illinois Municipal Retirement Fund, Iowa Public Employees Retirement System and New Mexico Public Employees Retirement Association.

Push for ESG
Tacoma plans to keep Wilshire on its toes by implementing greater importance on finding managers that prioritize DE&I and ESG-related strategies. These metrics will also be valued alongside standard due diligence conducted by the consultant on the investor’s behalf.

“We [Wilshire] have been working even harder in continuing to grow the diversity and have a culture of inclusion,” said Mark Makepeace, Wilshire’s CEO.

“We are starting to embed that philosophy very much into the services that we love. I’m starting to look at [investment] managers that we recommend and their diversity and inclusion policies,” he added.

Wilshire told With Intelligence that it uses insight reports and ESG-scoring when conducting manager searches for clients, but it also values firms that score low and are motivated to
improve.

In line with this focus, Wilshire has also hired a dedicated team of climate change experts.

Tacoma has offered Wilshire a contract of up to five years.

The board will next meet on March 10.