The Florida State Board of Administration (SBA) plans to hire consultants to provide advisory and review services for its real estate and strategic investments portfolios.
According to an invitation to negotiate document posted on SBA’s website last week, the state agency, which oversees the fifth largest US public pension plan, the $133.4 billion Florida Retirement System, has two separate components to its search. The first is a real estate consultant or consultants to advise on investments for its real estate portfolio, which currently has an estimated value of $10 billion and further is divided into a principal investments portfolio consisting of direct-owned investments in 50 properties and an externally managed portfolio with 22 pooled fund investments, five programmatic joint ventures and four global REIT managers.
The real estate consultant would be responsible for assisting with the development, implementation and maintenance of a real estate allocation policy; the periodical review of real estate policies and guidelines; the development and implementation of the SBA annual work plan for real estate; making available market research and white papers; providing data and analysis on investment managers; investment manager selection; and preparing a 10-year pacing model for the asset class. The contract for SBA’s current real estate consultant, The Townsend Group, expires on June 30.
The second component is for a consultant to provide real estate-specific support on its strategic investments portfolio, which includes non-traditional real estate investments such as senior real estate debt, high-yield real estate debt and distressed credit. Such investments – which currently include nine non-traditional real estate pooled funds and one non-traditional real estate separate account – represents less than one percent of the strategic investments portfolio, which currently is estimated at $6.3 billion.
The strategic investments consultant will assist with developing, implementing and maintaining the strategic investments plan; market research; providing quarterly reports; and selecting investment managers. SBA’s overall strategic investments consultant is Cambridge Associates.
The deadline for applications is April 15. SBA expects to select finalists by April 25 and make a final decision by May 14.