Private equity drives investment returns for Calstrs

Sofia Karadima
23 July 2018

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California State Teachers' Retirement System (Calstrs), the $223.8bn public pension fund, generated a 13.8% return from its private equity portfolio for the year to 30 June, making it the best performing asset class, and driving entire portfolio returns to 9%.

The US pension scheme beat its portfolio investment assumption of 7% for the second year in a row. However, it failed to reach its 14.7% custom benchmark return for private equity. Other asset classes with high returns included global public equity (11.7%), innovative strategies (11.4%) and real estate (10.4%).

Calstrs currently has 8.18% of its portfolio invested in private equity. Its target allocation is 8%. Private equity has outperformed other asset classes during the last decade, generating an 11.1% three-year return, a 12.4% five-year return and 8.8% for the 10-year period.

The LP has a private equity portfolio of 400 funds managed by 120 GPs with a total market value of $18.31bn.

Calstrs committed $200m to TPG Growth IV and another $200m to Francisco Partners V during 2017. It has also committed to Equistone Partners Europe Fund VI, Alchemy Special Opportunities IV and Spectrum Equity VIII.