CalSTRS has given CIO Christopher Ailman discretion to allocate up to $100 million each to new real estate managers and up to $400 million each in follow-on investments. Plus, staff at the $114 billion California State Teachers' Retirement System, Sacramento, will have to notify the investment committee when total allocations to a single firm exceed $500 million. The CIO has also been given discretion to approve individual deals up to $500 million of equity for firms picked by the investment committee. Previously, all individual real estate investments of $100 million or more required approval from the system's investment committee.
Separately, staff in December plans to submit a more flexible structure for the fund's $5.2 billion real estate portfolio. Currently, guidelines allocate 50% to low-risk investments and 25% each to moderate and high-risk strategies regardless of prevailing market conditions and whether the riskiness of an individual investment changes over time, such as through the addition of leverage.