According to a CalSTRS press release, the selected firm will help CalSTRS initiate, monitor and assess a global macro hedge fund strategy for its new absolute return asset class.
The strategy will undergo an incubation period of not more than three years. CalSTRS staff will work with the consultant to select three to six hedge fund managers who will invest a $200 million commitment in global macro strategies. Within the three-year period, the CalSTRS board will determine whether to expand or terminate the strategy, according to a press release.
Some of the consultant’s duties will be to help CalSTRS:
- Develop, review and update investment policies, procedures and a program structure.
- Develop a search strategy, identify highly qualified managers, and conduct due diligence on managers and investments.
- Monitor managers with regular assessments, conduct account valuations, identify problems and prepare quarterly reports.
- Conduct research and analysis on current issues and topics involving global macro hedge funds.
- Provide training and workshops on global macro hedge fund topics for CalSTRS staff and board members.
- During the three-year period, the global macro hedge fund strategy will be part of the innovation portfolio, which is charged with incubating new investment opportunities outside the traditional asset classes that CalSTRS currently uses. The purpose is to try out new investment strategies and to determine their success before committing large dollar amounts to them.
According to an announcement regarding the search, the final filing date for proposals is 2 p.m. PDT on April 29, 2010, with the consultant selection expected by early summer. The Request for Proposal is available for viewing on the CalSTRS Web site at www.calstrs.com/rfp.
The California State Teachers’ Retirement System, with a portfolio valued at $132.5 billion, is the second largest public pension fund in the United States. It administers retirement, disability and survivor benefits for California’s 848,000 public school educators and their families from the state’s 1,400 school districts, county offices of education and community college districts.