November 1, 2017 / 6:03 PM / a year ago

CalSTRS reports its investment fees for second consecutive year

(Reuters) - The California State Teachers’ Retirement System announced on Wednesday the total costs and fees paid to manage its investment portfolio for the second consecutive year.

CalSTRS found total expenses, including carried interest, reached $1.64 billion in calendar year 2016, or less than 1 percent of the portfolio’s $195 billion net asset value.

That percentage of fees and costs is virtually unchanged from last year, when the fund also paid less than one percent of its total portfolio.

CalSTRS is among the first public pension funds to keep tabs on investment expenses. Chief Investment Officer Christopher Ailman expressed disappointment on Wednesday at the sluggish adoption of disclosure reporting by peer institutional investors and limited partners in private equity and real estate.

Ailman said he knew of only five funds in the U.S. tracking private equity investment costs and fees. He did not know of any funds tracking real estate investment costs, as CalSTRS is doing.

CalSTRS’s disclosure comes at a time when public pension funds, which manage the retirement benefits of public sector workers and retirees, face growing pressure to disclose the fees that they pay.

CalSTRS is the country’s second largest public pension fund with assets totaling approximately $215.3 billion as of September 30, 2017. The fund represents teachers and other educators in California.

Reporting by Robin Respaut in San Francisco

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