CalSTRS Seeks to Manage More Assets Internally


CalSTRS CIO Chris Ailman

Taking the playbook from sapient Canadian public pensions, the California State Teachers’ Retirement System (CalSTRS) is attempting to migrate more assets toward internal management. In a press release, CalSTRS is planning to increase in-house assets from 45% to 60%.

See CalSTRS External Managers

Besides saving on investment fees and costs, CalSTRS desires to have more control over corporate governance issues. By owning the shares or underlying securities directly, CalSTRS can push forward with activist-based strategies. Obviously, publicly-traded securities are the first assets to go toward in-house management. CalSTRS also shifted some executive investment positions around to enable the organization to properly handle more internal management of assets. Among other promotions, Debra Smith was named CalSTRS chief operating investment officer.

“These three appointments, coupled with our 2010 creation of a Deputy Chief Investment Officer, complete a new organizational structure that allows us to bring more assets in house,” said CalSTRS Chief Investment Officer Christopher J. Ailman in a press release. “This structure matches what you find in most large investment money managers. This also fits our plans to internally manage more of our assets—currently at 45 percent in-house—to a projected 60 percent internally managed.”

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