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CalSTRS hires asset managers for $225m sustainability investments

Plans for major clean tech investment programme also underway

CalSTRS, the $169bn (€122bn) Californian State Teachers Retirement System, has hired four asset managers for a new $225m sustainable investment programme. Generation Investment Management, the firm part run by former US vice president Al Gore, won a $50m global equity mandate. It is joined on the CalSTRS roster by Acuity Investment Management, the Toronto based company which picked up a $50m Canadian equities mandate. New Amsterdam Partners, the New York-based manager, won a $75m large cap US equity mandate while Light Green Advisors, the Seattle-based sustainable manager and RhumbLine Advisors, the Boston-based index house, will jointly run a $50m US large cap mandate.
The fund managers have all been instructed to consider environmental factors in their stock selection and will join an ongoing initiative for green investment at the fund, which includes a $285 clean technology investment opportunities programme.
Jack Ehnes, CalSTRS chief executive officer, said: “As a ‘forever’ investor, we have to look at the impact environmental problems have on the long-term profitability of our holdings. Through this program and with these partners, we are using our members’ dollars tohelp address such environmental issues as climate change while generating sound returns. Environmentally responsible investing makes sense for the future growth and stability of our portfolio.”
The fund has also announced it is to cap the amount of money any of its incumbent asset managers can donate to campaigns for election of its board members, in a bid to eliminate so-called ‘pay-to-play’ opportunities. The rules will also apply to managers pitching for investment mandates or having any relevant commercial relationship with the fund. The new regulation limits contributions to a maximum of $1,000 from an individual or $5,000 from a company within a 12-month period. Any board members who receive contributions will have to withdraw from decisions regarding those managers. Firms that violate the regulations will be banned from doing business with the fund for two years.
CalSTRS is the second-largest public pension fund in the US. It administers retirement, disability and survivor benefits for California’s 795,000 public school educators and their families from the state’s 1,400 school districts, county offices of education and community college districts.