The $130 billion Californian fund, CalSTRS, will hire a deputy chief investment officer who will oversee the new absolute-return asset class, investment operations and a majority of the day-to-day investment branch management.
This brand new position will allow the chief investment officer, Chris Ailman, to focus more on portfolio management and asset allocation.
All existing heads of departments – innovation and risk, global equities, fixed income, real estate, private equity and corporate governance – will continue to report to Ailman, as will the new deputy.
In addition to overseeing investment operations, which has about 18 staff and includes cash management, portfolio controls, reporting and performance, and administration and management, the new deputy will manage the new absolute-return asset class.
An allocation of up to 5 per cent of the fund has been approved by the board for the absolute return asset class which is made up of Treasury inflation-protected securities (TIPS) and infrastructure, although no investments have been made in infrastructure yet.
A portfolio manager was appointed this spring and will develop internal processes, portfolio construction planning and hire a general infrastructure consultant.
The three-year plan is for five staff in this business unit, reporting to the deputy CIO.