The CalSTRS club in the making

One of the US’ largest pension funds, the California State Teachers’ Retirement System (CalSTRS), is considering putting together a consortium of pension funds to focus on investing in North America, its chief investment officer said during the Infrastructure Investment Summit in Washington DC, according to a webcast on the Department of the Treasury website.

“We’re building some partners (for the consortium). I don’t have them yet. But we’ll build a large fund ourselves, similar to the IFM model, (and) it will invest in and focus on North America,” Christopher Ailman said during the event, without elaborating on how the investment model would work.

IFM Investors, alluded to by Ailman, is an Australian fund manager which is owned by 30 Australian superannuation funds and claims on its website that its interests are “deeply aligned with those of our investors”. The firm often takes the lead in large consortia, an example being the $5.3 billion purchase of Ports Botany and Kembla last year – a deal which also included super funds such as Australian Super and CBUS.

While the Canadian market is fairly mature, Mexico should provide a lot of investment opportunities, according to Ailman.

“Mexico is making many of their markets open to competition, which will need a huge amount of capital and [will] be attractive in [terms of] rates of return,” he said.

The US market will be “a great complement” to that portfolio, but “only if there are transactions,” he added.

CalSTRS is expecting to invest $3 billion to $5 billion in infrastructure over the next five years, continuing its commitment to the asset class, according to Ailman.

According to Infrastructure Investor Research & Analytics, 0.55 percent of CalSTRS’ portfolio is currently invested in infrastructure, while the pension fund’s target allocation for the asset class is one percent.