CalSTRS simplifies investment process

A recent policy revision by the public pension fund allows investment staff to make investments of up to $300m without needing approval from the Investment Committee.

The California State Teachers’ Retirement System (CalSTRS), the second-largest public pension fund in the US, has simplified its investment process by allowing its investment staff to invest up to $300 million without requiring the approval of the Investment Committee (IC).

“Prior to this time, investment staff had to clear all prospective investments with the IC and have the IC sign off on funding the investment,” CalSTRS spokesman Ricardo Duran told Infrastructure Investor.

“This is not necessarily being driven by any particular pending investment but as a policy change,” he added.

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

With $181.1 billion in assets under management as of December 31, 2013, CalSTRS is the second-largest pension fund in the US and the largest teacher-only pension fund in the world.

The fund invests in alternative assets, with around 27 percent of total assets currently allocated to alternatives, including private equity, real estate, and inflation-linked strategies.

The CalSTRS Investment Committee established the infrastructure portfolio with a policy approval in 2008. Staff was dedicated to the programme in 2010.

According to Infrastructure Investor Research & Analytics, 0.52 percent of CalSTRS’ portfolio is invested in infrastructure, while the pension fund’s target allocation for the asset class is one percent.