Florida commits $260m to debt funds

The Florida State Board of Administration, which manages the state’s $113bn pension funds, has made commitments to ABRY, Oaktree and Varde, and is negotiating commitments to Audax and GSO.

The Florida State Board of Administration has committed $260 million to debt-oriented private equity firms since March, with three more commitments still in legal negotiations.

Florida SBA, which manages pension assets valued at about $113 billion as of December, 2009, has committed $60 million to ABRY Senior Equity Fund III, which closed on $750 million earlier this year. The board committed $100 million to Oaktree Opportunities Fund VIII, which will be split into an A and B structure. Fund A is targeting $4 billion, while Fund B will have no cap. Florida is making its commitment to Fund A, and also is considering a commitment to the “B” fund.

Fund B would serve as an “overflow” reservoir of capital, would not be capped, and would not incur management fees unless and until capital is drawn, according to information from the Oregon Investment Council.

Florida SBA also made a $100 million commitment to Varde Fund X, a distressed debt fund. The pension is in negotiations for undisclosed commitments for funds managed by GSO Capital and Audax, which is raising a senior loan vehicle.

Florida SBA’s debt-oriented portfolio is valued at $3.4 billion, which includes unfunded commitments. The pension has about $350 million left to invest for debt-related investments in fiscal year 2010.

Overall, Florida has been trying to invest between $1.5 billion and $2 billion in private equity for fiscal 2010, which ends on 30 June. The pension committed more than $1 billion in 2009, a year when many LPs stepped back from the asset class, and gained exposure to managers including Lexington Capital, GI Partners, KPS Capital Partners, Hellman & Friedman and TA Associates.