For the second year running, the California State Teachers’ Retirement System (CalSTRS) posted gains for its $116 billion investment portfolio, setting a positive tone for the pension fund as it enters a new fiscal year.
Overall, the pension fund’s value jumped 17.4% during the 2003-04 fiscal year. As of June 30, its private equity portfolio was valued at $5.4 billion, a 29.6% year-over-year gain.
With the start of a new fiscal year comes a new investment plan.
During the next twelve months, the pension fund’s private equity group will begin investing in Asian, Eastern European and Latin American private equity funds. This marks the first time it will explore private equity investment in regions beyond North America, the United Kingdom and Western Europe.
CalSTRS also plans to explore investments in clean energy technologies, a priority set forth by California State Treasurer Phil Angelides earlier this calendar year. It also plans to bulk up its portfolio of direct investments in private companies and secondary interests, which currently account for just 3% of the fund’s private equity portfolio.
All of these moves are part of an effort to boost the size of CalSTRS’ private equity program. The pension plan expects to put as much as 8% of its investment portfolio into the asset class over the next four years, up from the 4.7% allocation it currently maintains.