Florida Pension Commits to Alternatives

(September 22, 2011) — The Tallahassee-based Florida State Board of Administration (SBA) is allocating up to $6 billion in alternatives, the scheme revealed at an investment advisory council meeting.

The fund is seeking mangers to run the alternatives allocation, which will be divided into private equity, hedge funds, real estate, commodities, and infrastructure.

Within hedge funds, the board is targeting equity-oriented managers to focus on absolute return and long-short strategies, running up to a total of $800 million over the next year. Meanwhile, in private equity, the board is seeking to commit roughly $2.5 billion over the next three years to venture capital and other private equity firms. “These would be additional commitments per our 2011-2012 work plan,” SBA spokesperson Dennis MacKee confirmed with aiCIO.

In June, the Florida Retirement System revealed — amid aims to meet its 6% target to hedge funds — that it hired two hedge funds and is seeking to hire others. SBA awarded $100 million each to King Street Capital Management and Taconic Capital Advisors. The administration, which oversees the state’s roughly $131.5 billion pension fund, approved two additional hedge fund investments. Earlier this year, the board allocated $100 million to Mason Capital and $150 million to Highline Capital Partners, a long/short equity fund.