CalSTRS Seeks Currency Management Firms
Active Currency Specialists to Enhance Foreign Currency Exposure
SACRAMENTO, CA – The California State Teachers’ Retirement System (CalSTRS) has launched a search to establish manager mandates and a pool of currency managers to enhance its Currency Management Program.The final filing date for the request for proposal is October 5, 2007, with selections expected in spring 2008.
Firms hired will have full discretion to manage their mandates with the dollar amounts set upon completion of the contracts. The total program amount is expected to be from 15 to 20 percent of the overall currency exposure, or approximately $4.8 to $6.4 billion.
CalSTRS intends to award contracts as well as establish a pool of:
- Traditional overlay currency managers who will be limited to the countries currently invested in the CalSTRS portfolio (i.e., countries using the Euro, Japan, Switzerland, United Kingdom, Australia and Canada)
- Alpha-creation currency managers who will actively shift currency exposure to add value to the portfolio, to include expanding to other countries in consultation with investment staff
The Currency Management Program was established in 1995 to protect the value of CalSTRS’ non-U.S. assets against a strengthening U.S. dollar and has returned 7.91 percent since inception. These new managers will continue a shift in CalSTRS’ ability to add value to the portfolio in various U.S. dollar environments.
With a $169 billion investment portfolio, the California State Teachers’ Retirement System is the second-largest public pension fund in the United States. It administers retirement, disability and survivor benefits for California’s 795,000 public school educators and their families from the state’s 1,400 school districts, county offices of education and community college districts.