Administration July 4, 2006

CalSTRS Looking for More Emerging Market Managers

April 19 (PLANSPONSOR.com) - The California State Teachers' Retirement System (CalSTRS) has begun a search for up to six active equity managers to invest about 10% of its international equity portfolio in emerging markets.

Reported by

Kip McDaniel

This 10% amounts to $3 billion with CalSTRS weighing in as the third-largest public pension fund in the nation. Its total assets under management stand at $127 billion.

The deadline for bidders is June 7, according to a statement from the company; the chosen managers will be announced in the fall.

Looking for further diversification through international markets, the pension fund’s investment committee has crafted an emerging-market program aimed at increasing return with an eye on risk. The fund already has limited exposure to emerging markets through its active international equity managers.

The firms selected for the posts will have “full discretion” to manage their allocation within the program’s benchmark, the Morgan Stanley Capital International Emerging Markets Free ex-Tobacco Index, according to the statement.

Possibly implied in the move to hire more emerging market managers is that CalSTRS believes the US dollar – over the long-term – will continue to decline, according to some industry analysts. However, spokespeople for the pension fund told MarketWatch that the dollar did not have an influence on the decision.