The California State Teachers’ Retirement System (CalSTRS) has hired Scott Chan as deputy chief investment officer, the $225 billion fund announced Thursday.
Chan is currently the head of a $55 billion public markets portfolio at the University of California, whose central investment office manages roughly $100 billion in pension, endowment, and operational assets.
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Chan replaces CalSTRS’ first-ever internal investment officer, Michelle Cunningham. She joined the organization in 1991 to work on the fixed-income book, back when the entire fund amounted to $35 billion and its management was wholly outsourced to contractors. Cunningham rose to deputy CIO in 2012, making her the number two to longtime CIO Christopher Ailman.
Chan enters an unusually stable investment team, relative to most U.S. public pension funds. Governance challenges and political factors contribute to a fairly high turnover rate in the sector. Where most chief investment officers last for about four years, according to experts, Ailman has led the Sacramento-based CalSTRS for nearly 18 years.
Chan has deep roots in Sacramento and has known Ailman for more than a decade.
“I’m so impressed with the talent of the people and the cohesion of the team,” Chan told Institutional Investor late Thursday night by phone. “It speaks to the strong culture and that one of CalSTRS’ core values is developing talent.”
CalSTRS conducted a global search to replace Cunningham, according to the announcement.
“Scott is viewed by the institutional investment industry as one of the next generation of top global CIOs. He is a solid and steady investor with both public and private sector experience,” Ailman said in the statement. “His investment talents are only one side of the story. Scott also possesses the right temperament and personality to lead a very diverse — and growing — investment team. I couldn’t be more excited to team up with him in leading the CalSTRS portfolio into the future.”
Chan begins as deputy CIO August 1, the announcement said.