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CalSTRS strives to tackle challenges ahead

The US public pension fund is determined to against headwind for target returns.

The California State Teachers’ Retirement System (CalSTRS) revealed in its board meeting materials that it is studying new strategies to reach the return target. 

Currently, it sets its target return at 7.7 percent and 9 percent for core and non-core real estate investments respectively for the fiscal year 2017-18. Meanwhile, it expressed concerns over the challenges ahead. For example, overweight core-asset in the portfolio, rising interest rate and increasing asset supply would slow down the progress of achieving target returns. 

Looking forward, it may consider more joint venture, separate accounts and co-investment with closed-ended funds for real estate investments due to the low-fee structure, better company ownership and easy access to deal-flow.

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