CalSTRS increases long-term real estate target by 1%

The California State Teachers' Retirement System (CalSTRS) has approved a 1 percent increase to its current asset-allocation target for real estate, bringing the long-term target from 14 percent to 15 percent.

The decision took effect July 1, however, the actual allocation to real estate was already 15.59 percent as of May 31, a spokesperson for the pension fund confirmed in an email. Real estate is now at its long-term asset target of 15 percent, which was implemented as part of a multi-year plan involving “steps.”

The real estate asset class has a target range of plus or minus 3 percent to reduce rebalancing costs and allow flexibility to adapt to changing market conditions.

CalSTRS’ long-term asset allocation targets are set once every four years as part of an asset-management study.