The California State Teachers’ Retirement System is looking for control – over what it buys, when it sells and who it partners with.
Specifically, the $240 billion pension fund wants more control over how its private markets portfolio is constructed, and to do so it has come up with a new investment thesis called the collaborative model.
Prioritizing joint ventures, separate accounts and co-investments, along with various other non-fund structures, CalSTRS wants to be ‘the partner of choice’ for managers, operating companies and other institutional investors. Scott Chan, the fund’s deputy chief investment officer, believes this approach will save money on fees, improve alignment with partners and result in better risk-adjusted returns.
Earlier this summer, Chan and Mike DiRe, head of real estate, discussed the collaborative model with PERE and shared what it means for those looking to do business with the pension moving forward.