California State Teachers’ Retirement System (CalSTRS) has teamed up with investment manager Nuveen to invest up to $2bn (£1.75bn) via Nuveen’s energy and power infrastructure credit strategy.
The $397bn US pension fund has anchored Nuveen’s energy infrastructure credit (EIC) business as part of the partnership that will provide capital solutions to finance the buildout of critical infrastructure in OECD countries.
The partnership will target assets such as renewable power generation, energy storage, industrial decarbonisation and energy efficiency, as well as investing in the onshoring of infrastructure supply chains.
Nick Abel, investment director at CalSTRS, said: “This investment with Nuveen EIC aligns with our long-term outlook and mission to provide a secure retirement for our members.
“We believe sustainable infrastructure credit requires specialists’ expertise to originate, underwrite and structure bespoke capital solutions. Sustainable infrastructure credit also represents an important allocation for CalSTRS as we seek to generate strong risk-adjusted returns and contribute to a cleaner, more resilient, and affordable clean-energy economy.”
Nuveen has been actively scaling its energy debt platform, having raised an initial $1.3bn last year towards a $2.5bn target for its Energy & Power Infrastructure Credit Fund II. Key backers of the strategy include Nuveen’s parent TIAA, an unnamed “leading Canadian pension fund manager” and the Los Angeles City Employees’ Retirement System, which committed $80m to the vehicle.
Don Dimitrievich, global head of Nuveen energy infrastructure credit, said: “The demand for new energy, power, and digital infrastructure has never been greater. The rapid expansion of artificial intelligence, the onshoring of manufacturing and industrial supply chains, and the broad electrification of the economy are collectively creating a generational need for new infrastructure investment.
“We believe private credit is uniquely positioned to play a leading role in financing that buildout while also achieving positive sustainable outcomes.”
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