Florida lifts cap on alternatives to 30%

A newly enacted law will allow Florida State Board Administration to invest up to 30 percent of the state’s pension in alternative investments.

The law will free up to $18 billion in capital available for Florida SBA to make commitments to alternatives – a welcome relief for fund managers in what remains a tight fundraising environment.

As of now, it’s not clear how this will impact the state pension’s private equity allocation. Florida SBA currently allocates 11.5 percent of the plan to strategic investments and 9.6 percent to private equity. The system targets 6 percent to private equity.

In late May, Florida Governor Ron DeSantis signed into law a state bill that would allow Florida SBA to invest up to 30 percent of its total investment pool into alternatives, up from the previous cap of 20 percent.

Florida SBA manages investments for the state’s $180.4 billion pension plan, which is currently the only asset it manages that invests in alternatives.

Florida SBA has two buckets for alternative assets – private equity and strategic investments like private credit, infrastructure and hedge funds.

Florida SBA currently allocates 11.5 percent of the pension plan to strategic investments and 9.6 percent to private equity, according to its latest monthly report.

The system made the following private equity commitments in the first quarter according to its last new managers report:

• $100 million to TowerBrook Investors VI
• $75 million to Accel-KKR Capital Partners VII
• $100 million to TrueBridge Capital FSA III
• $20 million to SVB Capital Partners VI
• $50 million to Juniper Capital IV
• €132 million Waterland Private Equity Fund IX