A major overhaul at the Florida State Board of Administration’s alternatives program is near completion, and the pension likely will begin investing in earnest in that asset class throughout 2000, said Frank Fernandez, Florida’s private equity portfolio manager.
Earlier this month, the $93 billion pension named Bill James as the head of Florida’s newly-created alternative asset group, which includes the private equity portfolio. Previously, Florida invested in private equity through its domestic equities program.
James currently is the Florida investment board’s chief operating officer.
So far, the alternatives class includes only the private equity portfolio. Fernandez said Florida eventually will begin investing in other alternative assets, although he declined to give further details on particular focus areas.
In May, Florida’s private equity program suffered the departure of Irwin Loud, who left to head up a fund-of-funds at Muller & Monroe Asset Management, LLC (BUYOUTS May 31, p. 1). Since then, Florida’s executive director Tom Herndon placed Fernandez in charge of private equity and restructured the pension’s asset classes. Fernandez said his group is looking to solidify its team of investment professionals, after which it will begin to start investing again after nearly a year of inactivity.
“The year 2000 looks to be a very big year for re-ups for our portfolio,” he said. “After that, we might look at some new groups.”
Florida currently has $3.2 billion committed to private equity. The pension also has relationships with New York-based Liberty Partners and Lexington Partners, private equity firms which only invest capital from Florida’s pension.