CalSTRS to Decrease Fixed Income and Public Equity Allocations



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

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