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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

SWFI First Read, September 19, 2018

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QIA Eyes Investment in Chinese Lender Lufax

The Qatar Investment Authority (QIA) is in talks about a possible investment into Shanghai-based Lufax, one of China’s largest online lenders. The seller of the possible stake is China’s Ping An Insurance (Group) Co. Ltd. Lufax’s official name is Shanghai Lujiazui International Financial Asset Exchange Co. Ltd.

Wealth Funds Back Hotpot Giant

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Japanese Government Capital Provides Initial Life for Texas Bullet Train

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Dallas-based Texas Central Partners, LLC is the developer of a proposed high-speed rail system, dubbed the Texas Bullet Train, between Dallas and Houston. Project costs are estimated between US$ 12 billion to US$ 15 billion. The developer secured US$ 300 million in project loans from Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN) and the Japan Bank for International Cooperation (JBIC). [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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DOJ Investing Tesla Over Musk Comments

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The U.S. Department of Justice (DOJ) is conducting a fraud investigation over Tesla as its CEO Elon Musk made public statements on twitter. This is a criminal probe. In addition, earlier, SWFI reported the U.S. Securities and Exchange Commission (SEC) is conducting a civil inquiry into Elon Musk regarding his statements.

This all surrounds Musk tweeting in August that he was thinking of taking Tesla private and had “funding secured” for the transaction. Both government authorities are seeing if Musk misled investors and violated federal securities laws with his public statements.

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