CalSTRS hired Millennium Global Investments to manage $500 million in a currency overlay, confirmed Ricardo Duran, a fund spokesman, in an interview.
The $146.4 billion California State Teachers’ Retirement System, West Sacramento, hired currency specialist and alternative investment manager Millennium Global in December through an RFP and funded the investment earlier this year.
Millennium is the third currency overlay manager hired as part of an ongoing effort by the CalSTRS fixed-income team to reach the fund’s target for the strategy. The external currency manager allocation is expected to be approximately 15% to 20% of the non-U.S. public equity target allocation or roughly $4.7 billion to $6.3 billion, Mr. Duran wrote in an e-mail.
In 2006, CalSTRS’ officials decided to make its currency management program work toward bringing in added returns, as opposed to serving only a risk management function. In September 2008, staff issued an RFP for external currency overlay managers to run up to $6.4 billion.
According to CalSTRS’ most recent annual report, as of June 30, the fund invested a total of $486 million in FX overlay managers — FDO Partners ($157 million) and Lee Overlay Partners ($329 million).