CalSTRS Announces California Infrastructure Investments

WEST SACRAMENTO, Calif.--(BUSINESS WIRE)--The California State Teachers’ Retirement System (CalSTRS) today announced the expansion of its infrastructure program that includes a $42.8 million commitment to four California investments. Two of the investments are construction projects.

“We’re looking for those opportunities that require capital beyond municipal bond debt. We believe they’re out there and we intend to invest in them to the benefit of our state and our members.”

The California investments are:

• The construction of a portion of the Presidio Parkway transportation project in San Francisco.
• The reconstruction of the Long Beach courthouse in Los Angeles County.
• The operation of the gas-fired Crockett power plant near Oakland.
• The operation of the solar-electric Sun-Edison plant in the Sacramento area.

“These investments reflect CalSTRS’ commitment to the California economy and our willingness to contribute to it in a way that helps our state and offers the fund long-term, steady cash flows. The construction projects, in particular, will put more than 600 Californians to work,” said Chairman of the CalSTRS Investment Committee Harry Keiley. “We will continue to actively seek out greater investment opportunities in California infrastructure that meet our program objectives.”

The CalSTRS approach is to invest in long-term assets that hedge inflation and generate steady cash flows from high operating margins. CalSTRS is investing in funds initially, but eventually seeks to become involved more with co-investments and direct investments.

“California has a vibrant bond market that serves as an excellent vehicle for infrastructure investment,” Keiley added. “We’re looking for those opportunities that require capital beyond municipal bond debt. We believe they’re out there and we intend to invest in them to the benefit of our state and our members.”

The CalSTRS Investment Committee established the infrastructure portfolio in 2010. As of today, CalSTRS has committed $750 million to infrastructure assets. The most recent commitment is $100 million to the Meridiam Infrastructure North America Fund II, which closed in July 2012. In late 2011, CalSTRS partnered with Industry Funds Management on a two-part, $500 million global funds commitment. CalSTRS’ first infrastructure commitment was $150 million to the First Reserve Energy Infrastructure Fund in April 2011.

The California State Teachers’ Retirement System, with a portfolio valued at $152.5 billion as of August 31, 2012, is the largest teacher pension fund and second largest public pension fund in the United States. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and voluntary defined contribution plans, as well as disability and survivor benefits. CalSTRS serves California's 856,000 public school educators and their families from the state’s 1,600 school districts, county offices of education and community college districts.