CalSTERS believes that building teams and partnerships exhibiting diversity, equity and inclusion (DEI) are essential in achieving its financial objectives, making it resilient in an ever-changing investment landscape. It also considers that strengthening and maintaining its diverse staff and culture gives it a competitive advantage in bringing more assets inhouse to reduce costs through fewer management fees and less carried interest. This momentum rests on three core pillars: internal investments branch, industry and portfolio company engagement and portfolio management.

The pension fund seeks to attract diverse professionals who will drive innovation.Of its 236 staff, 45% are female and 53% non-white. Its investment leaders are 50% female, 33% non-white and 50% baby boomer generation.

CalSTRS considers diversity is crucial to the long-term financial success of the companies it invests in. It promotes this by exercising shareholder voting rights and speaking directly to company executives and board members. On a wider scale, its sustainable investment and stewardship strategies unit influences global markets by steering changes in corporate board and workforce DEI – for instance, working with Congruent Ventures, a venture capital firm supporting early-stage sustainable technology companies. Moreover, it has a long history of outreach through various engagement forums, such as Beyond Talk, a multi-year workshop through which CalSTRS establishes direct relationships to exchange DEI initiatives within a diverse pool of external investment managers.

CalSTRS continues to evolve its emerging managers programmeinvesting nearly $5bn over the past 30 years over a range of asset classes. Recently, CalSTRS Real Estate and Belay Investment Group approved an investment with Primestor’s Urban Vision Fund. Primestor is a minority-owned and led emerging manager fostering local economic development in overlooked urban communities. It has created over 14,000 local construction and permanent jobs generating $1.3bn in annual local economic activity in underserved Latino and black communities.