CalSTRS Gives Cambridge Top Honors

After a year of bids, appointments and negotiations, California State Teachers’ Retirement System (CalSTRS) has made one final shuffle to its roster of advisors and gatekeepers. Last week the Sacramento-based pension fund replaced longtime advisor and gatekeeper Pathway Capital Management of Irvine, Calif. with Cambridge Associates LLC of Cambridge, Mass.

Cambridge Associates will recommend private equity partnerships, perform due diligence and assist and advise the pension plan’s staff on investment opportunities as the plan’s new gatekeeper. Its contract will be valid for three years, plus two 1-year extensions.

Although Pathway Capital Management had played the role of both advisor and gatekeeper for the last five years, in November 2001 the pension fund said it would separate those roles and hire one manager to be its advisor and another to serve as an independent fiduciary. It named McKinsey & Co.’s San Francisco team to the advisory role in July, making it responsible for strategy and other macro-level issues.

CalSTRS’ private equity portfolio accounts for $4.3 billion of the fund’s $92 billion total market value. The fund invests in direct equity, private equity and venture capital partnerships.