Florida SBA considers slight hike in private equity target

The Florida State Board of Administration is considering increasing its target to private equity by 1 percentage point as it reduces its target to fixed income, according to sister publication peHub.

The SBA’s Investment Advisory Council recently approved increasing the allocation to private equity to 6 percent, from 5 percent, with a range of 2 percent to 9 percent. The SBA, which oversees the $135 billion Florida Retirement System, had an actual allocation to private equity of 5 percent as of September 30, according to documents from the system.

The change still needs to be approved by the full board of trustees, which would take place early next year, a Florida SBA spokesperson said.

Targets to fixed income would drop from 24 percent to 18 percent under the proposed changes, the SBA document said.

Florida has been one of the more prolific public system limited partners in private equity. Recent commitments have gone to Lexington Middle Market Investors III, Carlyle Partners VI, Riverside Capital Appreciation Fund VI, Apollo Investment Fund VIII, Silver Lake Partners IV, TowerBrook Investors IV, KPS Special Situations Fund IV and KKR Asia Fund II, among others.

The system also earlier this year hired Park Hill Group to run a sale of older private equity interests on the secondary market. The sale closed in the fourth quarter, according to a spokesperson for the system and included “mature funds that were approaching or had exceeded the end of their fund term,” the spokesperson said. “We viewed this as both a portfolio clean-up exercise and a way to redeploy capital into new opportunities.”

Funds in the sale included interests in Apollo Investment funds IV and V, Carlyle Partners II and III, Centre Capital Investors II, FS Equity Partners V, Green Equity Investors III, IV and VI, Hicks Muse Tate & Furst III, IV, V, Kohlberg Investors V, Ripplewood Partners II, Thomas H Lee Equity V, TPG Partners IV, Wellspring Capital Partners III and Willis Stein & Partners III.