WEST SACRAMENTO, Calif. – July 20, 2017 – The California State Teachers’ Retirement System announced today that the fund posted a 13.4 percent net of fees return for the 2016-17 fiscal year, with growth being driven by strong performance across all markets, led by non-U.S. equity. As of June 30, 2017, the total fund value was $208.7 billion.
WEST SACRAMENTO, Calif. – July 17, 2017 – The California State Teachers’ Retirement System has, for the fifth consecutive year, contributed one of its talented young—under age 40—investment officers, Orintheo Swanigan, to Chief Investment Officer magazine’s Class of 2017 Top Forty Under Forty.
WEST SACRAMENTO, Calif. – July 13, 2017 – The California State Teachers’ Retirement System today announced the appointment of Diane Stanton as External Affairs Director. In her new role, Ms. Stanton will provide leadership, management and strategic direction for the CalSTRS External Affairs program, with an emphasis on stakeholder relations, outreach and engagement. Her position reports directly to Public Affairs Executive Officer, Grant Boyken.
CalSTRS uses the dollar-weighted internal rate of return (IRR) to measure portfolio performance, as recommended by the Association of Investment Management and Research.
The CalSTRS IRR calculation method may differ from the methods used by the General Partner or other Limited Partners.
CalSTRS maintains records, including the IRR, for each limited partnership.
Factors Influencing IRR Calculations
There is no industry-standardized method for valuation or reporting, which makes comparisons of these numbers difficult. All of the following can create differences in IRR calculations:
The accounting treatment of carried interest
Partnership management fees
Other partnership expenses
Sale of distributed stock
In addition, the purchase of secondary interests makes for unique comparison problems due to the specific pricing and timing characteristics of the transaction when contrasted with the Limited Partners Investment.
IRR Over Time
The actual IRR performance of any limited partnership is not known until the final liquidation of the partnership, typically over 10 to 12 years. Until the liquidation takes place, the IRR is only an interim estimated return.
The IRR calculated for a partnership in the first three years of its life are relatively meaningless given the “J-curve effect.” The J-curve phenomenon is the effect of the cash-flow behavior of a partnership. It can be summarized as the first year’s investment expenses of investing in a fund that has yet to harvest its capital gains in the future. This normally translates into a negative IRR in the early years of the fund. The plot of the partnership values over time generally resembles a letter J.
Performance Report Disclaimer
Please note that none of the information contained in the Private Equity Portfolio Performance Report has been reviewed or approved by the General Partners of the funds.
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The California State Teachers’ Retirement System website has been developed in compliance with California Government Code §11135, which requires that all electronic and information technology developed or purchased by the State of California is accessible to people with disabilities. There are various types of physical disabilities that impact user interaction on the web. Vision loss, hearing loss, limited manual dexterity, and cognitive disabilities are examples, with each having different means by which to access electronic information effectively.