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California Pension Makes $500 Million Infrastructure Deal

Feb. 7 (Bloomberg) -- The California State Teachers’ Retirement System, the second-largest U.S. public pension, said it will invest $500 million in infrastructure projects such as water lines and mobile-phone towers.

The pension fund will make the investments in two parts over 18 months through Australia’s Industry Funds Management Pty Ltd., said Ricardo Duran, a spokesman for the California retirement system. The investments will be placed primarily in North America and Europe, Duran said.

The $144.8 billion pension fund is ramping up a new program to invest in infrastructure as a way to hedge against inflation and build stable, long-term revenue sources. The California Public Employees’ Retirement System, the largest public pension in the U.S. with $233 billion, has a similar program.

“Because we are so new at this, it’s in the core infrastructure which are things like water transmission, power lines, cell-phone towers,” Duran said in a telephone interview.

Phil Davey, a spokesman for Industry Funds Management, said he wasn’t immediately able to respond to a Bloomberg News request for comment.

The investment was reported earlier by the Wall Street Journal.

IFM, with offices in Melbourne, Sydney, London and New York, had more than A$30.2 billion ($32.6 billion) in funds under management worldwide as of Sept. 30, according to the company’s website.

The fund management firm is owned by 32 Australian pension funds and has infrastructure assets in Europe, North America and Australia, including 50Hertz Transmission in Germany, Anglian Water Co. in the U.K. and Colonial Pipeline in the U.S., according to its website.

It won a 35 million pound mandate from Leicestershire County Council Pension Fund to manage infrastructure investments, according to a statement from IFM on Jan. 26.

To contact the reporter on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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