Chicago Teachers’ Pension Fund scraps Cerity Partners over private equity concerns

The Chicago Teachers’ Pension Fund has restarted its search process for an investment consultant after cancelling their original selection over concerns to private equity ownership.

Seattle-based Verus Investments was previously selected in a March meeting by the Chicago Teachers Pension Fund’s investment committee to become its investment consultant. However in its latest meeting held April 9, the committee voted to reject Cerity Partners, which acquired Verus in February, after committee members shared concerns over how Cerity's private equity ownership can create reputational risks and potential conflicts of interest as an investment consultant for the pension fund. 

“At the April 9, 2026, Investment Committee meeting, the Chicago Teachers’ Pension Fund Board of Trustees voted to revisit the investment consultant search by issuing a new request for proposals. This action follows changes to the selected firm after the conclusion of the earlier RFP process,” Fernando Vinzons, CIO at CTPF, said in a statement to InvestmentNews. “No firm was approved at today’s meeting. A timeline for the new RFP will be established at a future date in accordance with CTPF’s procurement policy.”

The trustees voted to extend its contract for one year with Callan, the current investment consultant for the $13.8 billion Chicago Teachers Pension Fund. Chicago-based Cerity Partners is a mega-RIA that manages over $150 billion in client assets.

Cerity CEO Kurt Miscinski said in the April 9 meeting that his firm is 30% owned by Genstar Capital, 15% by Warburg Pincus, and 5% by Lightyear Capital while just over 50% is owned by Cerity employees. Vinzons raised concerns of this structure in the April 9 meeting before the committee voted to reject Cerity Partners. 

“What are the reputation risks linked to private equity ownership? A quick Googling, you can find things about these three individual private equity firms that will have an overhang on our reputation,” Vinzons said in the meeting. “Would we ever be faced with conflicts of interest because of new products that they incept? Could they decide to offer their own in house funds that then they would offer to us.”

Another concern raised by Vinzons was that while Verus focused its business as an institutional consulting firm, under Cerity it now accounts for only about 5% of a broader business dominated by wealth management, raising doubts about whether institutional consulting will remain a strategic priority over time for Cerity and its private equity owners.

Trustee member Vicki Kurzydlo also cited concerns over “aggressive cost-cutting and under-funding” from Genstar Capital, as well “high-debt acquisitions.” She also mentioned Lightyear’s SEC fine handed down in 2018 for misallocated expenses and improper fee‑sharing while questioning Miscinski over the risks posed by Cerity’s private equity owners. 

“I think you're right to bring up that in many cases, private equity at large has been able to create value for their investors and their fund by making investments in companies and potentially seeing how could they reduce cost to create value,” said Miscinski during the April 9 meeting. “But I'll tell you private equity at large does not have that view for professional services firms, they recognize that it's people that are the assets. And if you don't treat people well, you won't have people. And if you don't have people, you won't have clients.”

Miscinski added that Cerity has “never” reduced costs while growing to 1,700 employees since its founding in 2009. A PR spokesperson for Cerity did not respond to requests for comment.

“We have been very fortunate to have good experiences with private equity, which is why we wish to continue to have them. Our vision is to buy out our private equity partners. That is the current path we're on,” added Miscinski during the meeting.

Corey Kupfer, founder & managing partner of RIA M&A law firm Kupfer, says the Chicago Teachers Pension Fund’s vote to not move forward with Cerity Partners reflects broader interests the RIA industry needs to consider when selling ownership to private equity. 

“This is really a conversation of pension funds and PE [private equity]. There's some folks, who've raised the general question of, how is PE affecting investment in the RIA world and how does that affect fiduciary duty and conflicts of interest if firms are under PE pressure to grow,” said Kupfer.  

Trustees in the CTPF meeting earlier this month also questioned whether Verus and Cerity should have disclosed their merger or discussions earlier in the board’s selection process for an investment consultant. However, Kupfer says, “it's kind of a ridiculous issue in that people are under NDAs. So they couldn't have disclosed the deal, at least not without negotiating permission.”