Rumors Swirl Around Potential SDCERA CIO Insourcing

(August 9, 2010) – According to reports, the $7.4 billion San Diego County Employees Retirement Association (SDCERA) is contemplating appointing Lee Partridge as in-house chief investment officer and bringing about 17 new investment staff members on board – but Partridge himself is denying that he is considering such a move.

Pensions & Investments is reporting that Partridge, who currently handles the pension’s CIO duties on an outsourced basis, will work with board CEO Brian White to find ways to better handle staff shortages. Partridge was hired October 1, 2009 with an annual base pay of $535,000, and could be paid $886,000 in salary and bonuses under one of the proposals, according to Pensions & Investments. Under another proposal, investment staff would grow to 30 from 17.

However, when contacted by ai5000, Partridge denied that he is considering the move. “I have not discussed the possibility of becoming an employee of SDCERA with anyone,” Partridge told ai5000. “Frankly, I doubt that will be the direction this takes and it certainly isn’t something I’m considering.”

Additionally, Pensions & Investments is reporting that the SDCERA board is looking into hiring an outside consulting firm to analyze the costs of a larger in-house staff compared to outsourcing some of the jobs by studying the salaries of public pension funds, private pension funds, endowments and the private sector.

In April, while a new outsourcing plan was designed to help the San Diego County Employees Retirement Association (SDCERA) boost performance and efficiency, the SDCERA board decided to not outsource the rest of its investment staff to Integrity Capital Services due to concerns over conflicts of interest. Partridge, formerly deputy CIO of the Texas Teachers’ Retirement System, had told the county it could save $25 million by outsourcing the whole investment department and offered his own company.

Janet Levine, partner with law firm Crowell & Moring representing SDCERA, said hiring Integrity would be a conflict of interest as the firm was also involved in recommending the outsourcing of the staff. “I think we should look at other alternatives,” said Douglas Rose, board chairman.