CalSTRS looks to widen co-investment and direct investing

At its 7 February committee meeting, CalSTRS' investment committee will host a panel discussion to discuss various ways to expand its opportunity set. Participants in the discussion will include Mark Wiseman, senior vice-president at BlackRock, Jonathan Hausman of Ontario Teachers' Pension Plan, and Ashby Monk, executive director of Stanford University Global Project Centre, who has published extensively on the topic.

The LP has been active in the European co-investment space previously, including the NOK 21bn (€2.5bn) secondary buyout of Visma alongside HgCapital in April 2014, and BC Partners' take-private of Shawbrook Bank in June 2017. CalSTRS pledged £30m to each deal, according to Unquote Data.

This discussion is the second part of a four-part exploration of the topic, with the review scheduled to be completed in Q2 2018.

This investigation comes at a time when other LPs are looking at boosting returns from their private equity portfolios. Oregon Public Employees Retirement Fund (OPERF) noted in its annual private equity review that PE performance over the last decade has lagged relative returns from public markets, and explored ways of mitigating a continuation of a lower-return environment. OPERF is pursuing negotiating discounts on headline carried interest, as the LP secured with its recent $300m commitment to Bridgepoint Europe VI, as well as other ways of reducing fee drag.

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