After 24 years at the helm, CalSTRS chief investment officer Chris Ailman has announced his plans to retire later this year.
Ailman, one of the longest-tenured CIOs, has overseen the growth of the California State Teachers’ Retirement System from $109.6 billion in 2000 to $317.8 billion as of November 30, 2023. He announced his decision to retire, effective June 30, 2024, at the pension fund’s meeting on Thursday.
His tenure has been marked by not only growing assets under management, but also implementing the pension’s so-called Collaborative Model, adding emerging and diverse managers, and committing to net zero greenhouse gas emissions by 2050 or sooner.
For the 20-year period ending June 30, 2023, the portfolio’s return, net of fees, was 8 percent. This was one percentage point above the fund’s 7 percent benchmark.
“It has been an honor to lead and guide this massive global investment trust fund for the teachers of California,” Ailman said in a statement. “CalSTRS is truly a world-class asset manager and we have a powerful track record of top performance at a low cost with an amazing diverse internal team.”
When Ailman joined CalSTRS, it was a “pretty quiet, mom-and-pop kind of shop,” he told Institutional Investor in 2017. Under his leadership, the pension fund has transformed from its high-yield bond-focused days, diversifying across asset classes, adding a team solely focused on innovation, and adding inflation-sensitive and risk-mitigating strategies to the portfolio.
The crown jewel of this effort has been the Collaborative Model, a cost-savings and return-boosting program launched in 2017. Since its inception, the program has saved CalSTRS $1.6 billion by internalizing functions like trading and partnering with outside managers on co-investments and other fee-minimizing deals.
Ailman has also placed a heavy focus on diversity at CalSTRS, implementing internship and mentorship programs and committing capital to emerging and diverse managers. At the recent Global Fund Women Week, Ailman said: “It’s about breaking through unintended bias. You have to bulldoze through that to make change.”
Teachers’ Retirement Board Chair Harry Keiley praised Ailman in a statement: “His legacy and biggest contribution is his commitment to diversity and developing highly skilled professionals who have performed at a high level for more than two decades. I am eternally grateful to Christopher for all that he has given to CalSTRS, and I am confident the Investments team will continue to help us achieve our mission to secure the financial future of California’s educators.”
CalSTRS is immediately launching a global search for its next CIO. After the new investment chief is hired, Ailman will step out of the role, but will stay on as an advisor for the remainder of 2024.
According to CalSTRS, Ailman will pursue serving on boards and advising investment managers and allocators on the energy transition following his departure from the fund.
At present, he serves on the boards at FCLT — Focus Capital on the Long-term and MSCI’s Management Advisor Council, among others.
Ailman was awarded Institutional Investor’s Lifetime Achievement Award in 2017.