US - The US$153bn California State Teachers' Retirement System (CalSTRS) has set up an taskforce to investigate infrastructure investment before perhaps making its first committment to the asset class.
The fund said “early analysis” had shown that infrastructure investments warranted “a more thorough investigation as an investment opportunity for the CalSTRS investment portfolio”.
To this end, and because investing in infrastructure crosses multiple asset classes, the fund has set up an internal task force with staff from across alternative investments, credit enhancement, public equities, fixed income and real estate to “review and analyse” the opportunity to further assist in the process.
A spokesperson for the fund said: “At this point, the investments team is doing research, seeking out the pros and cons of infrastructure investments. They are also talking with others who invest in this type of investment and those that sell this type of investment.”
The spokesperson would not be drawn on whether the focus of the investigation was domestic or international infrastructure, or whether CalSTRS was eyeing the primary or secondary market.
“Because we are a public pension plan, governed by a board, our research process is very lengthy and detailed,” the spokesperson said. “Until the investment team actually has something salient to present to the board on the topic, there won’t be much to tell.”
CalSTRS plans to select an independent fiduciary to conduct a thorough due diligence of the entire infrastructure investment universe. Once staff and consultants have reviewed the risks and potential returns, these will be presented to the investment committee.
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