The Collaborative Model investment strategy has saved CalSTRS more than $2.5 billion since 2017, including more than $550 million in 2024, the CalSTRS investments team told the board during its November meeting.

The Collaborative Model focuses on reducing costs, controlling risks and increasing expected returns by managing more assets internally and leveraging external partnerships to achieve similar benefits.

These savings are typically generated by reducing management fees and carried interest paid by the total fund. Carried interest is profit-sharing that investors pay in some private-asset partnerships.

Co-investments are opportunities that require little to no management fees or carried interest and contribute more than half of the annual savings of the Collaborative Model.

While investment costs can fluctuate significantly each year, CalSTRS is a long-term investor and looks at long-term trends. The $2.5 billion in cost savings will compound over time and help the fund grow, enabling CalSTRS to meet its mission to secure the financial future and sustain the trust of California's public-school educators.