CalSTRS seeks help in ‘aggressive’ rebalancing

The state teachers’ pension is seeking a manager or managers to help it move from fixed income assets to real estate and private equity.

The California State Teachers’ Retirement System has launched a search for investment management firms to help the pension transition from traditional fixed income assets to a more aggressive blend of private equity and real estate.

CalSTRS may pursue “portfolio liquidation, asset allocation changes and portfolio rebalancing”, according to a press release.

Last month, the pension, among the largest in the US and a major backer of private equity and real estate programmes with $144 billion in total assets, announced a major increase in its target allocations to alternative investments, opening up a new pool of roughly $11.5 billion for capital commitments. At the same time the pension decreased its allocation to fixed income by 6 percent and US equity and cash by 1 percent each. Real estate received a 5 percent increased target allocation and private equity received a 3 percent increase.

In the statement, CalSTRS chief investment officer Christopher Ailman, said: “We are at the inception of an unprecedented change in our portfolio. These managers will be instrumental in our long-term asset allocation strategy to shift assets from fixed income to more aggressive blended investments that fall somewhere between our private equity and real estate asset classes.”