CalSTRS' investment committee rehired Townsend Group as its real estate consultant, but has decided to limit the new contract to three years without any extensions.
Townsend's current contract expires June 30.
The investment committee of the $157.8 billion California State Teachers' Retirement System, West Sacramento, made the decision to renew Townsend's contract on Thursday after a spirited discussion in which they were on the verge of not renewing it and instead choosing another finalist, Callan Associates.
Committee members said they were impressed with Callan's presentation and voiced criticism that the pension fund's real estate portfolio is not aggressive enough to meet its 9.75% yearly return target.
While committee members said they felt Townsend was doing a good job, communication issues between firm representatives and CalSTRS have been a problem, they said.
The third finalist was Courtland Partners.