CalSTRS' investment committee on Friday will be considering whether to cut the number of external money managers it will use in the fiscal year that started July 1.
Possible cuts in its outside manager lineup are part of the $132.1 billion California State Teachers' Retirement System's 10-year plan for its investments.
“With our new headquarters and equipment, we believe there are areas within the portfolio where internal asset management may be more effective and efficient,” according to the 10-year plan. “These include not just U.S passive equities and fixed income, but other facets of the portfolio as well.”
CalSTRS uses outside managers to manage 25% of its U.S. equities strategies, 50% of its global equity portfolios and 20% of its fixed-income strategies, CalSTRS spokesman Ricardo Duran wrote in an e-mail response to questions.
The West Sacramento-based system spent about $140 million on fees to external managers in the last fiscal year, according to the document.
Mr. Duran would not elaborate on the possible manager reductions.
The investment plan states that two core objectives are to add 60 basis points of added value over the policy benchmark for the overall investment portfolio and to achieve an absolute return above the actuarial assumed rate of return of 8%. Committee members have not decided whether the 8% rate is realistic given current market conditions; a new rate will be considered in November.
Without added contributions from school districts or teachers, CalSTRS has estimated it would run out of money by 2045.