CalSTRS officials expect to launch two RFPs this year, one for a private equity investment consultant and the other for a global custodian, the $254.1 billion West Sacramento-based pension plan staff said at an investment committee meeting.
Current private equity consultant Meketa Investment Group's contract is due to expire in September, CalSTRS CIO Christopher Ailman told the committee Jan. 30. He asked the committee for direction on how it would like to structure the RFP.
Mr. Ailman said that he doesn't expect many bids, typically five or less, because the California State Teachers' Retirement System does not give its private equity consultant discretion.
CalSTRS is also preparing an RFP for global custodian to be launched as early as in mid-March. State Street Bank has been CalSTRS' custodian for the past 30 years and would be invited to rebid. State Street's current contract does not have an expiration date, but the new contract would be for 10 years. CalSTRS is launching the search to ensure that State Street is still aligned with its goals or whether another global custodian would be a better fit. CalSTRS staff expects to select a finalist this summer.
The RFPs will be posted on CalSTRS' website.
Separately, the investment committee approved an implementation plan for its new asset allocation. Adopted in November, the new asset allocation plan includes three significant changes, including an 8 percentage-point reduction in public equities, an increase of nearly 4 percentage points in private equity and a 3.3 percentage-point rise in inflation sensitive strategies.
There are also three smaller changes: Real estate is to rise 1.1 percentage points, risk mitigating is to go up 0.6 percentage points and fixed income is to decrease 0.6 percentage points. The plan would increase the allocation in steps, as investment opportunities present themselves, but there is no set timeline.
