92: CalSTRS: How the $300+ Billion Pension Fund is Allocating in 2023 - With Christopher Ailman, CIO

04/13/23 • 53 min

In this miniseries we are interviewing a group of the largest institutional investors (the ‘super allocators’), to understand how these immense pools of capital think about the assets they invest in, shifting asset allocations, passive versus active, public versus private, and steering through turbulent waters.
This first conversation is with CalSTRS, the $300+ billion California State Teachers’ Retirement System. It is the largest educator-only pension fund in the world and the second largest pension fund in the United States.
In this episode, the fund’s CIO Christopher Ailman discusses its evolution and the key considerations undertaken during his tenure. He makes the case for predominantly passive equity allocations, the approach to fixed income and benchmark considerations.
He also covers infrastructure and its key role (given their long term horizons), PE allocation, and why VC does not fit their size and style.
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The Money Maze Podcast is kindly sponsored by Schroders, Bremont Watches, LiveTrade and Mintus.

Previous Episode

91: Perspectives from the World's Largest Asset Manager - With Salim Ramji, Global Head of iShares & Index Investments at BlackRock

‘Over the past decade, about 80 cents of every dollar that has gone into the US investment industry has ended up at Vanguard, State Street, and BlackRock. As a result, the combined stake in S&P 500 companies held by the Big Three has quadrupled, from about 5 percent in 1998 to north of 20 percent today.' These are the opening lines to the book, Trillions, by Robin Wigglesworth, Editor of FT Alphaville and a friend of the show.

Today, we further unpack the world of ETFs to understand their evolution, and how they are becoming a much broader wrapper for a multitude of strategies. Salim explains how CIOs, allocators, and individuals use their products to build portfolios and gain exposure to themes, strategies and markets.

Salim then dispels some of the myths of fixed income investing, before explaining how investors can use technology to vote whilst also owning passive vehicles, and how savers in Europe are changing their habits.

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The Money Maze Podcast is kindly sponsored by Schroders, Bremont Watches, LiveTrade and Mintus.

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93: Australia's Sovereign Wealth Fund - With Ben Samild, Deputy CIO of Future Fund

In 2002, the Australian Federal Treasurer, Peter Costello, commissioned the Australian Treasury to look at the long-term issues facing the nation and how adequately current generations were preparing for future ones. The message was bleak; “Australia’s ageing population would put immense stress on public finances, especially on health and aged care spending, over the next four decades”.

To help address this, the Future Fund was created, and it now looks after six public asset funds (totalling AUD $243.5bn of AUM, as of 31/12/22).

So in the second episode of our Super Allocator Miniseries, Ben Samild, Deputy CIO of Future Fund, explains its mission and strategy, including Future Fund’s mandate to achieve CPI + 4-5% returns per annum.

He explains the “total portfolio approach”, why they locate portfolio managers close to another, their approach to external manager selection, and why in the words of their former CEO that “too many institutional investors arbitrarily filled pre-determined asset class buckets with too many average quality assets in the name of diversification...risk management at its worst!“

From commodities to FX, from concentration to ESG issues, this is a compelling conversation that crosses borders and asset classes, challenging some conventional thinking.
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The Money Maze Podcast is kindly sponsored by Schroders, Bremont Watches, LiveTrade and Mintus.