CalSTRS commits $150m to First Reserve fund

The California State Teachers’ Retirement System (CalSTRS), in the quarter ending June 30, allocated $150 million to First Reserve Energy Infrastructure Fund II, CalSTRS spokesperson Ricardo Duran confirmed on Friday.

First Reserve, an energy-focused private equity firm based in Greenwich, Connecticut, closed its second energy infrastructure fund in June on its hard cap of $2.5 billion.

CalSTRS, the second-largest pension fund in the country, had committed $150 million to First Reserve’s first energy infrastructure fund in April 2011, making it the pension fund’s first infrastructure commitment. That fund closed in May 2011 on $1.23 billion.

First Reserve Energy Infrastructure Fund II will follow the same strategy as its predecessor by targeting long-term investments in sectors including contracted power (both renewable and conventional), regulated transmission and distribution, and contracted energy assets such as floating storage facilities.

“In the second quarter of 2014, one investment was closed for $150 million taking the total commitments to $1.25 billion,” CalSTRS’ investment committee wrote in its quarterly activity report for the period ending June 30.

CalSTRS invests its portfolio, which as of July 31, 2014 stood at approximately $186.6 billion, across six asset categories.

Infrastructure falls under its “inflation sensitive” category which also includes global inflation-linked securities. As of June 30, this asset class accounted for 0.7 percent of the total portfolio; infrastructure alone represented 0.67 percent of the total. The target allocation for the inflation-sensitive asset class for 2013-14 is 1.0 percent; the long-term target is 6.0 percent.

Founded in 1913 and headquartered in Sacramento, CalSTRS provides retirement-related benefits and services to over 862,000 public school educators.