CalSTRS Limits Commodities Investment, Allots $370 Million to Property in Q2

(October 11, 2010) — The board of the $134 billion California State Teachers Retirement System (CalSTRS) has limited its commodities investment to $250 million or less.

The board of the public pension decided to lower its proposed commodities investment from $2.5 billion. The plan was developed by the fund’s Innovation and Risk Unit, specifically by CalSTRS Investment Officers Carrie Lo and Steven Tong, who decided to lower the amount invested in commodities and allocate it over a three-year period to test how the investments perform. Investments may include commodity index futures and swaps, hedge funds and trend-following funds. CalSTRS chief investment officer Christopher Ailman has already endorsed the investment.

Separately, the California pension has invested $370 million in property during the second quarter of 2010, including a $200 million commitment to the Fortress Credit Opportunity Fund II, based on the recommendation of Cambridge Associates, IPE reported. Additionally, based on the recommendation of Bonuccelli & Associates, the fund invested $170 million in Pacific Cal II.

The pension fund has allotted 10.1% to real estate, or $13.14 billion through the end of June, which was divided into $8.9 billion in tactical and $4.2 billion in core.