Seattle City re-hires NEPC as Consultant

By Muskan Arora

The $4 billion Seattle City Employees’ Retirement System has chosen NEPC as their new consultant, pending board of administration’s approval on June 13 meeting.

While Meketa was the other semi-finalist in the race, NEPC has been Seattle City’s consultant since 2014.

Following the issuing of the RFP in January 2024, the system scored each candidate based on organizational factors (40%), consulting service factors (40%) and price (20%).

After conducting the required due diligence which included site visit, reference checks, reputational risk review and operational risk review, the investment committee solely chose NEPC.

Rose Dean from NEPC would continue to serve as primary consultant, after the contract renews on June 30 for five years.

In one of the recent SCERS’ meeting, Tim McCusker, NEPC’s CIO spoke about AI being one of the most scalable platforms as compared to the previous technological shifts seen.

“With the new activities and efficiency benefits that would be created by AI, in the current times, more than 80% of the growth is focused on China, Europe and North America,” said McCusker.

The CIO also talks about the production of microchips as one of the reasons for tension between China and US, which allows other emerging markets including India to produce their own microchips.

“Presently there aren’t many limitations on data creation but being able to organize that data is challenging. The processing power and the energy usage needed to analyze this data do have some sustainability issues. The material usage needs to be captured as well,” he presented to the Seattle City board.

SCERS Portfolio

As of Dec 31, the system allocates 44.9% or $1.76 billion to the public equity sleeve against a target of 46% or $1.84 billion within the equity bucket.

Of that same bucket, the system allocates 13.3% or $532 million to the private equity sleeve against a target of 11% or $440 million.

In the fixed income sleeve, Seattle has 15.6% or $624 million allocated to the core fixed income sleeve against a target of 14% or $560 million.

Within the fixed income sleeve, 4.9% or $196 million is allocated to the long-term fixed income sleeve against a target of 5% or $200 million.

Credit fixed income has 6.7% or $268 million allocation against a target of 7% or $280 million.

Under the real assets bucket, the system allocates 11.3% or $452 million to the real estate sleeve against a target of 12% or $480 million.

The system allocates 2.7% or $108 million to their infrastructure sleeve, within the real estate bucket, against a target of 5% or $200 million.