The Florida State Board of Administration plans to invest up to $1 billion into real estate as part of a wider push to invest up to $6 billion into alternative assets over the next three years.
The pension system, which has $155 billion in assets, wants to hire managers for several asset classes, including real estate, private equity, infrastructure and hedge funds, Florida State's communications manager John Kuczwanski told PERE sister publication Private Equity International. The pension plan expects to reach its $6 billion goal by allocating up to $2.5 billion to private equity investments and the same amount again to “strategic investments,” such as hedge funds, debt funds and other alternative strategies.
Florida State will be advised on its real estate investments by The Townsend Group, while Hamilton Lane will recommend managers for its private equity investments, as will its strategic investment consultant Cambridge Associates. Infrastructure consultant Mercer will make recommendations for that asset class. The pension plan will not issue any requests for proposals.
“Back in 2010, we began a shift in our asset allocation, which included increasing alternatives, but in order to do that we needed to seek legislative authority,” Kuczwanski said. Florida State has a 10 percent allocation limit to alternatives, but it is hoping to increase that to 16 percent. “We’re approaching that 10 percent, and we’re seeking that expanded authority in the upcoming legislative session, which starts in January,” he added.
The pension plan did not provide an allocation breakdown of individual alternative asset classes.
Florida plans $1bn in RE commitments
The $155 billion pension system plans to commit up to $6 billion to alternatives over the next three years, including up to $1 billion to real estate. Townsend is helping Florida to determine where to make its investments.
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