Pacific Corporate Group may soon lose one of its largest advisory clients, just weeks after four top managers left in a dispute over firm economics. The Oregon Investment Council will soon issue an RFP for a new private equity consultant, which is separate from an existing private equity RFT for the smaller Oregon Growth Accounts Board.
PCG gets to retain its non-discretionary role in the interim, but it doesn’t much matter since Oregon does not plan to make additional private equity fund commitments in 2006. PCG also has the right to submit a proposal of its own, but that’s like saying that I have the right to bid against Henry Kravis for a new townhouse in Manhattan. This is not a situation where “On any given Sunday…” is applicable.
None of this is surprising, of course, since PCG lost the main people that groups like Oregon agreed to do business with in the first place. I’d expect similar RFPs from other public advisory clients – if it hasn’t happened already – with the possible exception of New York City (which has much larger private equity problems to deal with).
The only silver lining for PCG is that it recently hired an experienced salvage artist in David Scopelliti, who previously rehabbed Connecticut’s scandal-ridden private equity program. But David was hired just weeks before the resignations, and I wonder if this reclamation project might be too large for even his capable hands.