Here’s What One Allocator Thinks of Five Investment Consultants

Rhode Island put outanRFP for an ESG consultant. A document from the investment commission reveals how five contenders stacked up.

Illustration by II

Illustration by II

Buried inside a relatively banal state investment commission document is a revealing ranking of investment consultants.

The Rhode Island State Investment Commission had put out a request for proposal for an ESG consultant back in August. The commission was seeking to an advisory firm to help it develop its own environmental, social, and governance policies for investing in private assets.

Six weeks later, the group, which manages $8 billion in state pension assets, had seven responses, five of which fit its minimum qualifications. These firms, which included Wilshire, Goldman Sachs Asset Management, NEPC, Aon Hewitt, and RockCreek, were then ranked.

Out of the five, the search committee recommended Wilshire, although it’s unclear whether Rhode Island has entered into a contract with the firm yet. Neither a spokesperson for Wilshire nor one for the state investment commission responded to emails seeking comment.

According to the commission document, Wilshire was selected for its “depth of ESG-focused resources, strong proposed support team with robust ESG experience, extensive breadth of ESG consulting services, and highly positive client references.”

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The RFP overview and recommendation, which was published online in late October, shows that the investment commission judged the consultants based on five categories: stability and experience of the firm; quality, depth, and experience of personnel; client relations and references; ESG consulting; and fee proposal score.

The categories were weighted, with the ESG consulting score worth the most at 35 percent. Factored into this score were the length of time that each firm had provided ESG services, the quality and breadth of services offered, and the resources and knowledge of each firm, among other considerations.

In this category, Wilshire scored the highest, while Aon performed the worst. Wilshire also received the best score in the stability and experience category, where NEPC was ranked the lowest.

NEPC performed best when it came to the fee proposal — weighted at 25 percent of the overall grade — while Aon performed the worst.

Within the quality, depth, and experience of personnel category, consultants were scored based on their experience providing similar services to institutions, the accessibility of key staff members, and the depth and turnover of personnel. In this category, Wilshire again ranked first, while Aon was once again ranked last.

Finally, the client relations and references category scored firms on the stability of their client bases and on the references they received from clients. Wilshire topped this category too, while RockCreek was ranked last.

Overall, NEPC was ranked second, followed by Goldman Sachs Asset Management in third, RockCreek at No. 4, and Aon in last place.

If hired, Wilshire will take on the responsibilities of providing recommendations for the incorporation of ESG in the investment commission’s due diligence, selection, and monitoring of private investments. The consultant will also be asked to provide the investment commission with strategies to encourage private asset managers to better manage ESG risks on their own, and identify potential improvements in the process, the RFP overview showed.