CalSTRS Securities Lending Program 2015 Annual Report

Overview May 19, 2016

CalSTRS Securities Lending Program 2015 Annual Report

General Information May 23, 2016

Required Skills for Program Management

Knowledge of asset/liability management methods.
Awareness of factors that influence the fixed income/equity finance markets.
Understanding of trading techniques associated with short-term fixed income assets.

General Information May 23, 2016

Director’s Summary

The Securities Lending Program performed well during 2015, earning over $85.4 million. The program has averaged over $100 million in earnings during the past five calendar years. Program earnings continue to be a steady source of incremental income, generating over $1.44 billion for CalSTRS since its inception in 1988, adding, on average, over four basis points annually to the total portfolio.

General Information May 23, 2016

Program Overview

The California State Teachers’ Retirement System Securities Lending Program, established in 1988, represents CalSTRS’ first non-core investment program.

General Information May 23, 2016

Program Management Process

The Securities Lending Program incorporates a dynamic process involving People, Philosophy, Process and Performance which is summarized in a one page chart. Learn more about the Program Management Process.

General Information May 23, 2016

Program Structure

By policy, the program objective for the CalSTRS Securities Lending Program is to assist the Teachers’ Retirement Fund in meeting its investment goals by generating incremental income through collateralized, low-risk, short-term loans, using a portion of the lendable assets within the portfolio.

General Information May 23, 2016

Performance Results

By policy, the program objective for the CalSTRS Securities Lending Program is to achieve lending income commensurate with:

The market demand for the securities made available for lending.
The return earned on the investment of the cash collateral within the program guidelines set forth by CalSTRS.

General Information May 23, 2016

Cash Collateral Asset Management

The cash collateral portfolio managers are responsible for investing the cash taken as collateral from loans of securities. Each of the portfolios is diversified among different asset classes, based upon investment guidelines developed by CalSTRS and emphasizes safety of principal and adequate liquidity.

General Information May 23, 2016