CalSTRS increases alternatives allocations

Following close on the heels of CalPERS’ portfolio allocation changes, the $173 billion California State Teachers’ Retirement System has increased its private equity allocation to 8 percent.

The California State Teachers’ Retirement System has raised its private equity allocation one percentage point to 8 percent, as it continues its gradual, five-year climb toward a 9 percent target.

The $173 billion (€119 billion) public pension also increased its real estate allocation to 10 percent, in keeping with its long-term target for that asset class of 11 percent.

To manage the shift to the new allocation targets established by CalSTRS’ investment committee, the pension is taking what it calls a “step approach” with gradual, step-by-step increments in its target for real estate and alternative investments.

“We’re not target chasers,” CalSTRS’ alternatives head, Réal Desrochers, said in the October issue of sister magazine Private Equity International. “We try to be good investors.”

The changes come two months after the $250 billion California Public Employees’ Retirement System’s decision to increase both its real estate allocation and private equity allocations to 10 percent each.