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CalSTRS approves revised infra policy

CalSTRS’ investment committee unanimously approved a policy change that allows the $140bn California pension to allocate more capital to private infrastructure investments.

The California State Teachers Retirement System (CalSTRS) investment committee unanimously approved a revision to its infrastructure policy at a 7 April meeting, according to a spokesperson for the $140 billion pension.

The revised policy recalibrates the balance between publicly-listed equities and private investments within the pension’s infrastructure portfolio.  Under the new policy, public equities can only account for 20 percent of the infrastructure portfolio, as opposed to 30 percent under its previous policy, adopted in July 2008. That leaves more room for private infrastructure investments, such as separate accounts, funds, joint ventures and direct investments.

The revision also adds a new category to the two previously-established allocations for private infrastructure investments. In addition to “core” and “value added” infrastructure, CalSTRS has now established an allocation for “opportunistic” investments.

John Petzold, director of investment management at CalSTRS, said in a previous meeting that the revised policy should provide a “more clear and focused way to manage the investment strategy”. 

CalSTRS allocates 5 percent of its portfolio to the absolute return asset class, and half the absolute return class is dedicated to infrastructure. The pension has yet to make any infrastructure investments, but the agenda for the 7 April meeting included a closed discussion about an infrastructure investment opportunity.