Teachers and Rebuilding America

From the WSJ this year:

"U.S. public pension funds have historically been less enthusiastic than their Canadian peers about direct infrastructure deals, but one institution is looking to pave a path for more investors to take that route.

The nation’s second-largest public pension fund, California State Teachers’ Retirement System, is in talks with other institutional investors about joining forces to get stronger collective rights in infrastructure deals, said people involved in the discussions.

Members of Calstrs’s investment committee will meet Feb. 6 to discuss including new language to its investment policy that states the pension fund may “invest alongside with other like-minded investors” through “consortium investment opportunities.” The approach would be similar in investing through alliances or joint ventures.

The roughly $188.8 billion Calstrs, which established its infrastructure portfolio in 2010, has invested in that sector primarily through funds, said a spokesman. It hasn’t bid on private infrastructure investments with a club of direct investors.

The pension fund, which had a roughly $800 million infrastructure portfolio as of Sept. 30, is planning to build out its private infrastructure footprint to roughly $3 billion in the long term, senior officials said.

U.S. public pension funds have shown a smaller appetite for infrastructure than their Canadian peers, according to industry tracker Preqin. They’re seen as lacking the same expertise and in-house resources as Canadian funds to take a more hands-on role in deals.

But U.S. pension funds would be a welcome capital source if they bolstered their ability to make direct infrastructure deals.

“Pension funds tend to be providers of patient, long-term capital, which aligns their interest well with infrastructure asset owners in the public sector,” said Chris Taylor, executive director of the West Coast Infrastructure Exchange, a nonprofit organization seeking, among other goals, to bring together various kinds of investors to finance public works infrastructure projects."