CalSTRS Selects Five Firms to Manage Emerging Markets Equities
Sacramento, CA – California State Teachers’ Retirement System has selected Baillie Gifford Overseas Ltd., Lazard Asset Management LLC, Mondrian Investment Partners Ltd., Templeton Asset Management Ltd., and T. Rowe Price International Inc. to manage its new active Emerging Markets program. The managers will invest about 10 percent of CalSTRS’ international equity portfolio, approximately $3 billion, in emerging markets.
The managers were selected through a competitive process and will have full discretion to manage their allocation, including country and stock selection, within the program’s benchmark, the Morgan Stanley Capital International Emerging Markets Free ex-Tobacco Index. CalSTRS currently has investments in emerging markets on an opportunistic basis through its active international equity managers.
“The response to this process was tremendous and we are very excited with the quality and experience of the firms selected. The addition of these managers will allow us to capitalize on a multitude of niche investment opportunities in the international market place,” said Elleen Okada, director of global equities and operations. “The emerging markets program was carefully designed to achieve the best return on our members’ funds while mitigating the risks associated with investing in this market.”
The CalSTRS board has chosen an unrestricted investment universe for emerging market investments. The emerging market managers must consider CalSTRS’ investment policies and standards and 20 risk factors adopted by CalSTRS in making investment decisions. Those risk factors range from business practices such as securities regulations and fiscal transparency to legal and other practices such as workers and political rights and environmental issues.
With a $133 billion investment portfolio, CalSTRS is the third-largest public pension fund in the United States. It provides retirement, disability and survivor benefits to California’s public school teachers from kindergarten through community college, serving more than 755,000 members and their families.