Petzold to lead CalSTRS' infra effort

The $130bn pension is continuing to build its infrastructure programme, promoting John Petzold to head its 'absolute return' asset class, which includes infrastructure.

The California State Teachers’ Retirement System has promoted John Petzold to oversee the absolute return asset class, which includes infrastructure investments.

Petzold has been named first director of investment management/deputy chief investment officer at the pension. Petzold’s promotion puts him on the same level as the pension’s director of private equity Margot Wirth.

Earlier this year, the $130 billion pension named Diloshini Seneviratne, a senior investment officer on the private equity portfolio, as its first portfolio manager for infrastructure.

CalSTRS has been building up its capabilities around infrastructure investing this year. The pension plans to commit to infrastructure fund managers in the early days of the programme, and eventually build up capabilities to make direct investments, CalSTRS chief investment officer Chris Ailman told PEO in a prior interview.

Infrastructure managers looking for capital from CalSTRS will have to forego the private equity model of 2 percent management fees and 20 percent carried interest, Ailman said.

“The private equity 2-and-20 model doesn’t work because I want stable cash flows,” Ailman said. “I don’t want to leverage it, I don’t want to pay 20 percent because I’m not trying to get the giant return out of it. I’m trying to get something … like a fixed income return.”

In March, CalSTRS named Wirth director of its $16.8 billion private equity portfolio. The pension has had about 20 employees dedicated to the private equity programme, which as of February made up about 12.7 percent of the total fund.

CalSTRS private equity portfolio includes commitments to at least 245 funds, according to a 31 March 2009 private equity portfolio performance memorandum.