The California State Teachers' Retirement System
The California State Teachers' Retirement System is taking a more conservative approach to real estate investing. The system's board of directors told its staff to increase the fund's portfolio of core real estate assets by one-third, which would mean reducing its activity in value-add and opportunistic investments. It also wants the fund to reduce its use of leverage in future deals. "Our board has gotten gun shy. They want to re-trench risk," Charles W. Haase, a CalSTRS investment officer, said last week at the U.S. Opportunity & Private Fund Investing forum in Manhattan. The event is sponsored by Information Management Network. The board's decision has crimped the fund's ability to commit additional equity to non-core investment managers. "We have six to eight managers that we'd like to re-up with, but that's difficult to do with the new core focus," Haase added.
CalSTRS' real estate portfolio of more than 200 directly-owned assets and investments in opportunity funds was valued at $17.9 billion, or 11.5 percent of its total assets as of April 30. Its targeted allocation for real estate is 11 percent. The pension fund has $155.4 billion of assets under management. Its real estate portfolio sustained a 12.4 percent loss for the fiscal year ended June 30, 2010, and 43 percent in the previous fiscal year. |
