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CalSTRS to Decrease Fixed Income and Public Equity Allocations

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CalSTRS HQ

CalSTRS HQ

The investment committee of the California State Teachers’ Retirement System (CalSTRS) today voted on enabling modifications to their long-term asset allocation targets. The US$ 170 billion pension giant reduces global equity from 53% to 51% and fixed income from 20% to 16%. Illiquid asset classes such as institutional real estate and private equity had small increases. The inflation-sensitive asset class has a long-term target of 6% set by the investment committee – implementation in this asset class will be handled with patience. The changes in asset allocation would be phased in over a 2.5 year period.

“These are studies we conduct every three years and this was a critically important one, examining the effectiveness of our response to the global financial crisis of 2008-09,” said CalSTRS Investment Committee Vice-Chair Sharon Hendricks in a CalSTRS press release. “This study was invaluable in familiarizing our board members with the elements and dynamics of our portfolio. Our examination of the market allows us to adapt and to coax consistent long-term growth from a chaotic environment.”

Christopher Ailman, the chief investment officer of CalSTRS, is ranked #31 on the Public Investor 100.

New Asset Allocation Targets for CalSTRS – September 2013

Asset Class Current Targets New Long-Term Targets
Global Equity 53.00% 51.00%
Fixed Income 20.00% 16.00%
Real Estate 12.00% 13.00%
Private Equity 12.00% 13.00%
Cash 1.00% 1.00%
Inflation Sensitive 2.00% 6.00%
Absolute Return (formerly Overlay) 0.00% 0.00%

Source: CalSTRS

Mergermarket Gets Ready to be Sold

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Private equity firm BC Partners hired Goldman Sachs Group Inc. and JPMorgan Chase & Co. to advise on the sales of Acuris. Acuris is a collection of financial news and data sites, which includes Mergermarket, Dealreporter, and Debtwire. In 2017, BC Partners sold around a 30% stake in GIC Private Limited.

Before the rebranding to Acuris, Mergermarket was part of The Financial Times Group until 2013 when it was sold off to BC Partners.

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Why Japan Post Sees Promise in Aflac

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Aflac Inc. is an American insurance company founded in 1955. The company is the biggest provider of supplemental insurance in the United States. Aflac also has major operations in Japan.

In December 2018, Japan Post Holdings (JPHLF) signaled it was spending US$ 2.64 billion for a 7-8 % stake in Aflac. The goal is that, in four years time, Aflac will become an affiliate of Japan Post. Japan Post hopes to accomplish this by becoming the largest voting shareholder of the company. The world’s 13th largest company, with 400,000 employees, Japan Post needs to expand to chase further growth, mainly because Japan Post expects the postal business to decline. Diversification is seen as the optimal route to long term stability for the holding company. Japan’s economy is worrying. Japan’s aging population means that many insurance companies are facing a shrinking customer base, Japan Post settled on a plan to expand overseas.

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RDIF and Development Agency of Serbia Agree to Explore Joint Investments

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The Russian Direct Investment Fund (RDIF) and the Development Agency of Serbia, also known as Razvojna agencija Srbije, reached an agreement to work together to identify attractive investment projects to strengthen bilateral economic ties and increase investment flows between Russia and Serbia. Russian capital and businesses are keen on investing in Serbia.

In addition, the two countries signed an agreement to cooperate on civil nuclear energy, according to state-owned Russian reactor builder Rosatom (Rosatom State Nuclear Energy Corporation). Rosatom continues to expand it business of nuclear cooperation deals in a wide number of countries.

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