CalSTRS staff proposed shifting nearly $3 billion in domestic equities to active from passive management, signaling potential RFPs down the road for external active equity managers. Staff and consultant Pension Consulting Alliance recommended the $90 billion California State Teachers Retirement System, Sacramento, shift its target split between passive and active strategies to 70%-30%, with bands of five percentage points. Currently, the target mix is 80% passive, and 20% active.
Currently, Barclays Global Investors and CalSTRS staff each manage $13.4 billion in Russell 1000 funds, while BGI and State Street Global Advisors run $1 billion each in Russell 2000 funds. CalSTRS runs another $1.2 billion in an internal, passively managed transition account. There was no information on which passive funds would be reduced to fund the shift, or a timetable for RFPs.
CalSTRS investment committee will consider the proposal on March 5. The system currently has 16 external active domestic equity managers running nearly $8 billion.