As soon as contract negotiations are completed, Altius Associates Ltd., a private equity advisor with offices in Copenhagen, London and Richmond, Va., will begin managing CalSTRS’ $585 million international private equity portfolio.
Although the Sacramento-based California State Teachers’ Retirement System nearly reached its allocation target for international private equity investments – 15% of the fund’s $4.4 billion private equity portfolio – the addition of an international gatekeeper is meant to position the fund for future growth abroad, says Sherry Reser, a spokeswoman for the fund.
CalSTRS’ international private equity portfolio currently includes investments in Canada, Europe and the U.K. with investments in firms like London’s Candover Investment, Apax Partners’ pan-European Funds, and Permira Europe (formerly Schroder Ventures Europe) of Frankfurt.
CalSTRS is currently in the final stages of selecting an U.S. gatekeeper for its alternative investment portfolio. CalSTRS invests in direct equity, private equity and venture capital through its alternative investment portfolio.
In June, CalSTRS named four independent fiduciaries to its alternative investment portfolio – Ernst & Young Corporate Finance in Los Angeles, Houlihan Lokey Howard & Zukin Financial Advisors of Los Angeles, KPMG in San Francisco and Standard & Poor’s Corporate Value Consulting in San Francisco. Those advisors will provide due diligence on the investment funds that gatekeepers like Altius recommend.
At the same time, the plan’s investment committee selected McKinsey & Co. in San Francisco as its consultant on strategy and macro-level issues.
Although Pathway Capital Management of Irvine, Calif. had served both functions, CalSTRS announced it would split the plan’s need for a gatekeeper and independent fiduciary consultant into two separate functions in November and issued a request for proposals RFP for a domestic and international gatekeeper in March. CalSTRS manages roughly $100 billion.