CalSTRS Securities Lending Program 2014 Annual Report

CalSTRS Securities Lending Program 2014 Annual Report

Overview
Fixed Income - Securities Lending Program

Securities Lending Program Management Team: Glenn Hosokawa, CFA, Director of Fixed Income; Roy Clothier, CFA, Program Analyst; John Perez, Cash Collateral Portfolio Manager; Debra Ng, CFA, Trader/Analyst

General Information

Director’s Summary

The Securities Lending Program performed well during 2014 by earning over $91.8 million. The program has averaged over $101 million in earnings over the past five calendar years. Program earnings continue to be a steady source of incremental income, generating over $1.35 billion for CalSTRS since its inception in 1988, adding, on average, over four basis points annually to the CalSTRS portfolio.

General Information

Program Overview

The Securities Lending Program, which was established in 1988, represents CalSTRS’ first non-core investment program. It was designed to enable the Teachers’ Retirement Fund to use its existing asset base and investment expertise to generate a steady source of incremental income, adding over four basis points to the entire fund on a regular basis over the long-term. While this income is not risk-free, processes have been put into place to help mitigate the risks associated with securities lending. In addition, program staff working closely with the Corporate Governance team to develop/streamline processes to facilitate the return of CalSTRS’ shares to vote as proxy voting is a priority within our organization.