March 04, 2025

E142: How to Generate Alpha on $350 Billion w/CIO of CalSTRS Scott Chan

44 minutes

In this episode of How I Invest, I have a conversation with Scott Chan, Chief Investment Officer of CalSTRS, to explore how he oversees a staggering $350 billion in assets. Scott shares insights on CalSTRS’ collaborative investment model, their approach to private and public markets, and why they aim to be the "global partner of choice." We also discuss the importance of structural alpha, liquidity management, and identifying long-term supply-demand imbalances.

Highlights:

The Collaborative Model: How CalSTRS brings more assets in-house to lower costs and increase control over risk and alpha.

Public vs. Private Markets: Why 80–85% of public market assets are managed internally while private investments rely on partnerships.

Becoming the Global Partner of Choice: Why being a top three call for GPs is crucial for accessing the best private market transactions.

Portfolio Allocation Strategy: How CalSTRS is shifting risk exposure toward private markets to enhance returns.

Contrarian Investing: Scott’s view on why the stock market may underperform over the next decade and where he sees better opportunities.

The Importance of Liquidity: Why liquidity will be "more valuable than gold" and how CalSTRS prepares for market downturns.

Identifying Supply-Demand Imbalances: Where CalSTRS sees long-term opportunities, from real estate to private credit and infrastructure.

Structural Alpha: How CalSTRS structures deals to generate uncorrelated alpha without taking additional market risk.

Governance and Decision-Making: How a nimble, delegated investment approach allows CalSTRS to act quickly on opportunities.

The Role of Team & Culture: Scott emphasizes why a strong leadership team is the ultimate competitive advantage.

Guest Bio:

Scott Chan is the Chief Investment Officer of CalSTRS, overseeing $350 billion in assets for over one million California teachers. With decades of experience in institutional investing, Scott has led CalSTRS in developing its collaborative investment model, focusing on cost efficiency, structural alpha, and strategic partnerships. His contrarian mindset and deep expertise help position CalSTRS as a global leader in asset management.

Our Podcast now receives more than 200,000 downloads a month. Are you interested in sponsoring an episode? Please email David Weisburd at [email protected].

We’d like to thank @JuniperSquare for sponsoring this episode!

#VentureCapital #VC #Startups #OpenLP #AssetManagement

Sponsor:

Juniper Square is dedicated to transforming the private markets investing experience. The company provides a full range of modern, connected fund technologies and services for over 2,100 private markets GPs across fundraising, reporting, fund administration, treasury, compliance, and business intelligence. Today, over $1 trillion of assets and 600,000+ LP accounts are managed through Juniper Square software and fund administration services. Learn more at www.junipersquare.com.

Stay Connected: X / Twitter:

David Weisburd: @dweisburd

LinkedIn:

David Weisburd: https://www.linkedin.com/in/dweisburd/

Scott Chan: https://www.linkedin.com/in/chanscott/

Links:

CalSTRS: https://www.calstrs.com/

Questions or topics you want us to discuss on How I Invest? Email us at [email protected].

(0:00) Episode preview

(1:09) Introduction to CalSTRS and collaborative investing

(2:11) Public vs private markets and global partnerships at CalSTRS

(5:26) Public and private market investment strategies

(7:03) Collaborating with private managers and selecting GPs

(11:41) Contrarian thinking and current investment focus

(17:13) Liquidity management and market opportunities

(18:19) Sponsor: Juniper Square

(19:43) Liquidity options and alternative asset opportunities

(21:31) Market crisis preparation and governance structure

(26:30) Exploring structural alpha and capital base implications

(31:20) Leveraging supply-demand imbalances in investing

(35:58) Personal alignment and development as a CIO

(40:29) Closing remarks

...more

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By David Weisburd

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