Calstrs Seeks to Borrow More Than $30 Billion to Manage Cash
- Calstrs could leverage 10% of portfolio under new policy
- Adds to growing trend of pensions adopting riskier investments
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The California State Teachers’ Retirement System, the country’s second-largest pension fund, may borrow more than $30 billion to help it maintain liquidity without having to sell assets at fire-sale prices, according to a new policy its investment committee will consider this month.
If approved, the policy will allow staff to borrow as much as 10% of the roughly $318 billion portfolio. The proposal calls for leverage to be used “on a temporary basis to fulfill cash flow needs in circumstances when it is disadvantageous to sell assets,” a Calstrs policy document said.