What if the biggest edge in managing $390 billion isn’t picking assets—but controlling risk and liquidity when markets break? In this episode, I sit down with Scott Chan, Chief Investment Officer of CalSTRS, to discuss how one of the largest institutional investors in the world is positioning for a period of massive structural change. Scott breaks down how AI, deglobalization, and the energy transition are driving a multi-decade investment cycle, why traditional diversification is breaking down, and how liquidity and dynamic allocation become critical in volatile markets. We also explore structural alpha, co-investing at scale, and how governance and partnerships enable CalSTRS to generate returns without taking incremental market risk.

Highlights:

• Why stocks and bonds may no longer provide true diversification
• How liquidity becomes the biggest advantage during market dislocations
• What “structural alpha” looks like at a $390B portfolio
• Why infrastructure is a multi-decade opportunity
• How CalSTRS scaled co-investments from 2% to 30%+ of the portfolio
• The real edge of governance and delegated decision-making
• Why AI is driving a fixed asset investment boom
• The mistake most investors make during market recoveries

Guest Bio:

Scott Chan is the Chief Investment Officer of CalSTRS, one of the largest pension funds in the world with approximately $390 billion in assets under management. He previously served as Deputy CIO and now oversees a team of more than 200 investment professionals across public and private markets. Scott is a board member of the Toigo Foundation, co-chair of the Institutional Investors Roundtable, and serves on multiple advisory boards including the Milken Institute, AIMA, and CAIA, with a focus on advancing diversity and innovation in asset management.

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Sponsor:

AlphaSense is the AI-powered market intelligence platform trusted by 85% of the S&P 100, helping investment professionals make faster, more confident, data-driven decisions. Built for hedge funds, asset allocators, private venture capital firms, and investment bankers, AlphaSense uses advanced AI and powerful search across premium proprietary content to surface the insights that matter most—before the market moves. Elevate your research and stay ahead of the competition. Visit https://www.alpha-sense.com/howiinvest/ to learn more.

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LinkedIn:https://www.linkedin.com/in/chanscott/

Questions or topics you want us to discuss on How I Invest? Email us at david@weisburdcapital.com.

Disclaimer:

This podcast is for informational purposes only and does not constitute investment, financial, legal, or tax advice. Nothing in this episode should be interpreted as an offer to buy or sell any securities or to participate in any investment strategy. All opinions expressed by the host and guests are their own and do not represent the views of Weisburd Capital. Participants may hold positions or have financial interests in the companies, funds, or investments discussed. Any references to specific investments are for illustrative purposes only. Investing involves risk, including the potential loss of capital. Past performance is not indicative of future results, and any forward-looking statements are subject to risks and uncertainties. Any third-party data or opinions have not been independently verified. Listeners should conduct their own research and consult their own advisors before making any investment decisions.

(0:00) How CalSTRS Is Positioning for an Era of Extreme Uncertainty (1:40) Why the Old 60/40 Portfolio May Be Quietly Breaking (4:00) The New Assets Scott Believes Can Actually Diversify Risk (6:30) Why Regional Investing Could Matter More Than Ever (8:10) How CalSTRS Built Structural Alpha at Massive Scale (12:00) The Hidden Edge of Owning More Control in Private Markets (16:40) Why Co-Investments Became One of CalSTRS’ Biggest Advantages (21:00) Why Venture Capital Has Become Strategic for the Entire Portfolio (25:00) The Asset Class Scott Thinks Could Win the Next Decade (28:40) The Mistake CalSTRS Made When Markets Rebounded