# Callan Analysis Asymmetry The structural asymmetry in independent-investment-consultant analytical attention between the Infrastructure Secondaries and Private Credit investment decisions versus the Israel Bonds investment decision the APERS Investment Finance Subcommittee took at the same meeting on May 15, 2025. In the same 69-page IFSC packet that authorized $25 to $50 million in Israel Bonds and up to $100 million each in three infrastructure secondary funds: - **Callan analysis on Infrastructure Secondaries: 32 pages.** The packet (pages 72-103) contains "Arkansas Public Employees' Retirement System Infrastructure Secondaries Search Finalists" dated May 12, 2025. Coverage: a six-step Manager Search Process documentation; client-specified Candidate Profile criteria; six individual manager profiles (Ares Secondaries Infrastructure Solutions III, Blackstone Strategic Partners Infrastructure Fund IV, HarbourVest Infrastructure Opportunities Fund III, Macquarie Alliance Partners Infrastructure Fund, Pantheon Global Infrastructure Fund V, Partners Group Infrastructure Secondary) with key professionals, fund terms, AUM growth, leverage policies, distribution waterfalls, and key person provisions; a Candidate Comparison; a Performance Comparison appendix; and Important Disclosures including the Callan Client Disclosure showing that 5 of the 6 finalists are themselves Callan investment manager clients. - **Stephens Capital Management Private Credit material: 7 pages.** Packet pages 45-51 contain a "Private Credit Refresher" presentation with sections on private credit overview, why private credit, the public/private credit spectrum, private debt sub-strategies, low-risk-high-return analytics, and direct lending historical performance. - **HarbourVest Credit Secondaries material: 11 pages.** Packet pages 53-63 contain the May 2025 HarbourVest Credit Secondaries presentation, including discussion of liquidity demand, GP-led vs LP-led deal mechanics, default-rate cumulative data, hypothetical return profiles, and credit secondaries portfolio benefits. - **Neuberger Berman Direct Lending material: 8 pages.** Packet pages 64-71 contain NB Private Debt May 15, 2025 materials, including direct lending all-weather positioning, EBITDA and yield comparisons across direct lending vs broadly syndicated loans vs high yield, and the Mechanix Wear case study. - **Carlos Borromeo CIO Report: 8 pages.** Packet pages 37-44 contain the APERS strategic asset allocation framing and Secondary Infrastructure overview. - **Callan analysis on Israel Bonds: zero pages.** The IFSC packet contains no Callan Israel Bonds report, no Callan Israel Bonds memo, no Callan analytical attachment, no Callan recommendation, and no Callan reference to Israel Bonds anywhere. The packet ends at page 103 with the Callan Client Disclosure for Infrastructure Secondaries. - **Any independent investment-consultant analysis on Israel Bonds: zero pages.** No Stephens analytical material on Israel Bonds is in the packet. No HarbourVest material. No Neuberger Berman material. No outside written analysis of any kind. The "Israel Bonds – Jason Brady" agenda item line was the entirety of the formal analytical structure before the IFSC; Brady's verbal presentation at the meeting was the entire substantive case. ## The structural pattern The Callan analysis asymmetry is the APERS-side instance of the broader independent-credit-analysis gap pattern documented at [[independent-credit-analysis-gap]]. The same investment-decision process that produced ~58 pages of independent-consultant-or-manager-firm analytical material on the non-Israel-Bonds investment decisions (32 Callan + 7 Stephens + 11 HarbourVest + 8 Neuberger Berman) produced zero pages of independent analytical material on the Israel Bonds decision. The same APERS Investment Finance Subcommittee. The same five members at the table (Wallace, Bassett, Carnahan, Hudson, Walther) plus Brady as the IFSC member presenting Israel Bonds. The same packet. The same meeting at 1:00 PM in the APERS Board Room. Borromeo's 5/8/2025 7:08 AM IFSC agenda email to Fecher acknowledges the asymmetry contemporaneously and intentionally: "Secondary Infrastructure – Carlos will lead discussion. (I would like to add 3 new investment managers to the APERS lineup) / Private Credit discussion – Bo and team Stephens will lead the discussion (I didn't feel that we had the 'ok' to go ahead with P/C, so we are bringing in the firms with the knowledge) / ... / Israel Bonds – Mr. Jason Brady". The Israel Bonds presentation explicitly does not include any firm "with the knowledge"; Brady alone is the entire presenter. The IFSC chose to bring substantive analytical firms for two emerging-asset-class decisions but to accept Brady's verbal presentation as the analytical record for the Israel Bonds decision. ## Parallel to the ATRS instance The Callan analysis asymmetry at APERS structurally parallels the Aon Hewitt analytical-gap finding at ATRS documented at [[independent-credit-analysis-gap]] and [[atrs-resolution-2025-22]]. The ATRS 6/2/2025 Board packet contained substantive Franklin Park recommendation memos for Arlington Capital Partners VII and Great Hill Equity Partners IX (both $40M private equity authorizations the same Board approved alongside the $50M Israel Bonds Resolution 2025-22), but only an empty Kelly + Comstock memo header for the Israel Bonds attachment (Attachment 17, packet pages 149-150). Both pension systems' authorizing packets contain substantial consultant material on the parallel non-Israel-Bonds investment decisions taken at the same meeting and zero substantive consultant material on the Israel Bonds decision. The two-system structural asymmetry sharpens the [[independent-credit-analysis-gap]] from a single-system finding to a multi-system pattern: the same procedural standard ("consultant-recommendation-driven investment decisions") that governs the rest of pension fund investment decision-making at both ATRS and APERS does not apply to Israel Bonds at either system. ## Callan Client Disclosure The Callan Client Disclosure on packet page 103 of the IFSC packet records: "As a matter of policy, Callan follows strict procedures so that investment manager client relationships do not affect the outcome or process by which Callan's searches or evaluations are conducted." The disclosure shows that 5 of the 6 infrastructure secondaries finalists are themselves Callan investment manager clients (Ares, Blackstone, Macquarie, Pantheon, Partners Group); only HarbourVest is not. The 5/15/2025 IFSC's three approved authorizations were Partners Group, Ares, and Pantheon — three Callan investment-manager-client firms. This conflict-disclosure context is structurally relevant but does not alter the analytical-attention asymmetry: Callan still produced 32 pages of analysis on the Infrastructure Secondaries decision, regardless of the disclosed conflict, while producing zero pages on the Israel Bonds decision. ## Evidence > [!evidence] Carlos Borromeo to Amy Fecher, IFSC agenda email, IB_FOIA_MAY_25_Reviewed.pdf p.587, 5/8/2025 7:08 AM > "Israel Bonds – Mr. Jason Brady" > [!evidence] Carlos Borromeo to Amy Fecher, IFSC agenda email, IB_FOIA_MAY_25_Reviewed.pdf p.587, 5/8/2025 7:08 AM > "Private Credit discussion – Bo and team Stephens will lead the discussion (I didn't feel that we had the 'ok' to go ahead with P/C, so we are bringing in the firms with the knowledge)" > [!evidence] Callan report cover, IB_FOIA_MAY_25_Reviewed.pdf p.72, dated 5/12/2025 > "Information contained herein is the confidential and proprietary information of Callan and should not be used other than by the intended recipient for its intended purpose or disseminated to any other person without Callan's permission. ... May 12, 2025 / Arkansas Public Employees' Retirement System / Infrastructure Secondaries Search / Finalists" > [!evidence] Callan Search Background and Process, IB_FOIA_MAY_25_Reviewed.pdf p.78 > "Six funds are being advanced for consideration by Callan's Alternative Review Committee / Manager / Fund Name / Ares / Ares Secondaries Infrastructure Solutions III / Blackstone / Blackstone Strategic Partners Infrastructure Fund IV / HarbourVest / HarbourVest Infrastructure Opportunities Fund III L.P. / Macquarie / Macquarie Alliance Partners Infrastructure Fund / Pantheon / Pantheon Global Infrastructure Fund V / Partners Group / Partners Group Infrastructure Secondary" ## Cross-References [[callan]] APERS investment consultant whose analytical attention exhibits the asymmetry [[bo-brister]] [[stephens-capital-management]] Stephens Capital Management; Borromeo's "fixed income eyes" request to Brister produced no documented Israel Bonds analytical product [[carlos-borromeo]] APERS CIO whose IFSC agenda email contemporaneously framed the asymmetry [[jason-brady]] IFSC presenter on Israel Bonds whose verbal presentation was the entire substantive case [[apers-israel-bonds-authorization]] the IFSC action this asymmetry frames [[independent-credit-analysis-gap]] the parent concept page for the multi-system pattern [[westrock-procedural-asymmetry]] parallel one-person-two-procedural-standards finding at ATRS [[atrs-resolution-2025-22]] [[atrs-bot-packets-7-3-25]] parallel ATRS structural asymmetry [[apers-foia-r1-7-7-25]] source page ## Chunk 2 (JUL 25 PDF) extension: full Callan-APERS analytical relationship contains zero Israel Bonds analysis The 7/7/25 APERS R1 production Chunk 2 extends this concept page from a packet-level finding to a full-Callan-work-product finding. The 4Q2024 Callan Reports for APERS and AJRS (transmitted by Brianne Weymouth on 2/12/2025 via Email 75) totaling 478 pages contain ZERO Israel Bonds analysis. Israel appears only as country-attribution data in the international equity portfolio analysis (Mellon ACWI ex US Fund, Baillie Gifford Overseas, Lazard Asset Management, Acadian ACW ex US SmallCap, Franklin Templeton Intl SmallCap). Eleven Israel hits across 478 pages, all in MSCI ACWI ex-US country-allocation tables. The 1Q2025 Callan Reports for APERS (transmitted 5/23/2025 via Email 51) totaling 360 pages similarly contain no Israel Bonds analysis. The reports cover all APERS investment managers in detail (CastleArk, Mellon S&P 500, Horrell, Boston Partners, Mellon LCV, CastleArk LCG, Mellon LCG, Wellington, William Blair, Stephens MCG, LSV, Stephens IMG, Froley Revy, Artisan, Mellon ACWI ex-US, Baillie Gifford, Lazard, Acadian, Franklin Templeton, Blackstone, DoubleLine, MacKay Shields, PGIM, MCM REIT, Invesco, Heitman, Carlyle, Clarion, Principal, Harrison Street, LaSalle, Starwood, TA Realty, IFC Core Farmland, PGIM Agriculture, Pinnacle) but contain no Israel Bonds material. The Q1 2025 reports were prepared after the IFSC's Israel Bonds discussion was already on the agenda but before the 5/15 vote. The IFSC packet's empty Israel Bonds attachment is therefore confirmed not to be an isolated oversight but a structural feature of the Callan-APERS analytical relationship. Across Callan's complete 4Q2024 + 1Q2025 quarterly reporting cycle for APERS and AJRS — totaling over 838 pages of consultant analytical material — there is no Israel Bonds analysis at all. Callan does not produce Israel sovereign credit analysis, Israel Bonds investment recommendations, or Israel sovereign yield comparisons for APERS as part of its standing consulting engagement. Brianne R. Weymouth, CAIA (Senior VP, Fund Sponsor Consulting) and John P. Jackson, CFA (Senior VP) are the named Callan consultants. They presented at the 6/11/2025 APERS Board meeting per the agenda (item 5b: "Ms. Brianne Weymouth and Mr. John Jackson, Callan - Quarterly Report for the Period Ending March 31, 2025 (Page 27)") with no Israel Bonds material on the agenda for their portion. The same Callan consultants presented at the parallel ASPRS June 11 and AJRS June 12 Board meetings without Israel Bonds material. The structural finding: APERS authorized $25-50 million in Israel Bonds without obtaining or commissioning any Callan analysis on Israel sovereigns at any point in the documented period. ## APERS R2 (2-27-26): Callan silence extends across the full ten-month post-authorization period The R2 meeting record extends this concept page from a packet-level and reporting-cycle-level finding to a sustained ten-month structural absence of Callan analytical product on Israel Bonds across all five post-vote APERS oversight meetings: - **9/10/2025 IFC**: Borromeo's memo on Act 937 of 2025 China divestment compliance. No Callan Israel Bonds material. The 4-page IFSC packet contains the single substantive memo plus a brief MSCI ACWI Index country list (which includes Israel as a "Developed Market: Europe & Middle East" alongside Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom). - **9/10/2025 Q3 Board**: Weymouth and Jackson presented the Callan Quarterly Report for Q2 2025 (period ending June 30, 2025). The minutes record Weymouth's discussion of APERS fund position ($12,409,065,645 in real assets, 14th percentile vs peers, hedge fund 12.19% FY25, timber wind-down by 2027). Zero Israel Bonds material in the Callan discussion as recorded in the minutes; the 115-page Q3 Board Packet contains one Israel hit at page 580 in international equity country attribution ("Israel 53.60% / Israel 22.13%" — quarterly returns). - **12/3/2025 Q4 Board**: Weymouth and Jackson scheduled per the agenda to present the Callan Quarterly Report for Q3 2025 (period ending September 30, 2025), at packet page 25. The 101-page Q4 Board Packet contains one Israel hit at page 493 in international equity country attribution ("Israel 4.12%"). No Callan Israel Bonds analysis. No Callan Israel Bonds memo. No Callan Israel Bonds recommendation. - **12/18/2025 IFC**: No Callan material. The 23-page IFC Packet contains zero Israel mentions. - **2/3/2026 IFC**: No Callan material. The 34-page IFC Packet contains three Israel hits: one country-attribution (4.12%), two in the Arkansas Code § 25-1-503 boycott-clause vendor certification template. The agenda's "Update on Investment Consultant RFQ" item is the procurement-action that may replace Callan as APERS's general investment consultant; the RFQ scope of work codifies a written-memo-on-CIO-recommendation requirement that was absent for the May 2025 Israel Bonds authorization. Across the four Callan quarterly reports covering FY2025 (4Q2024, 1Q2025, 2Q2025, 3Q2025 = 4Q calendar 2024 through Q3 calendar 2025), totaling well over 1,000 pages of Callan analytical product for APERS, there is zero Israel Bonds analysis. The 5/15/2025 IFSC vote authorized a brand-new $25-50M commitment without any Callan analytical product. The ten months of post-vote Callan reporting added no Israel Bonds analytical product. The structural finding is now documented as a sustained pattern: Callan does not produce any Israel sovereign or Israel Bonds analytical work for APERS at any point across the entire wiki-documented period. The Stephens Capital Management private-markets-consultant relationship displays the same structural pattern. Larry Middleton, Bo Brister, and Seth Middleton presented Stephens Quarterly Reports at all post-vote APERS Quarterly Board meetings (3/12/2025, 6/11/2025, 9/10/2025, 12/3/2025). None contained Israel Bonds analytical content. The 5/14/2025 Borromeo "fixed income eyes please" request to Brister produced no documented analytical follow-up. The two consultants together do not produce any Israel Bonds analytical product across the entire pre-vote and post-vote documented period. The 5/15/2025 IFSC authorization rests on Brady's verbal presentation alone. Post-vote oversight rests on no analytical product from either consultant. The pattern is structurally identical to the [[independent-credit-analysis-gap]] documented at ATRS via the Aon Kelly + Comstock empty-memo finding. [[apers-foia-r2-2-27-26]] source page ## Tensions This concept page surfaces 1 first-class tension filed as a tension page per the Hegelion layer documented at [[methodology]] § II. - [[T014 - Callan Asymmetry as Procedural-Defect vs Structural-Role-Constraint]] — the contested mechanism is what the Callan/Aon analytical absence on Israel Bonds establishes. Statement A: a substantive procedural defect in the pension-system investment-decision process, where the same consultant-recommendation-driven standard that governs the rest of investment decision-making at ATRS and APERS does not apply to Israel Bonds at either system, and the within-packet asymmetry (32 Callan pages on Infrastructure Secondaries vs zero on Israel Bonds; substantive Franklin Park memos on Arlington/Great Hill vs empty Kelly + Comstock memo on Israel Bonds) is the documented outlier under each policy. Statement B: a structural-role constraint on what general investment consultants are engaged to produce, where Callan and Aon advise on manager-selection and portfolio-level oversight but not on individual direct-investment sovereign-debt credit analysis, and the asymmetry reflects engagement-scope architecture rather than procedural deviation. *Framing tension. Status: open. Note: this tension parallels and intersects with [[T003 - Westrock-vs-Israel-Bonds Procedural Standard]] and [[T004 - BP4 Section A5 Compliance on Israel Bonds]]; the licensure-scope reading deployed there reinforces Statement B here.*