Florida pledges $800m to buyout, debt funds

The $157bn system committed a total of $1.25bn across alternative investments during the third quarter of 2012.

The Florida State Board of Investment committed $800 million to private equity and debt fund managers during the third quarter of the year, including The Carlyle Group and Oaktree Capital Management.

The $157 billion system committed $200 million to Carlyle Partners VI, which is said to be targeting around $10 billion, and $100 million to Oaktree’s ninth distressed debt fund targeting $4.9 billion.  Fund IX, which has raised $4.6 billion as of 30 June, according to a Dow Jones report, is not expected to commence the investment period until 2013, according to Oaktree.

Hamilton Lane advised Florida on both commitments, as well as two other investments: a $150 million commitment to Wayzata Investment Partners’ third opportunities fund focused on distressed debt and $100 million to Falcon Investment Advisors’ fourth fund focused on mezzanine debt. 

Florida also committed $150 million to Grove Street Advisors' GS Partners Ventures III and $100 million to Tricon Capital’s eleventh fund, a distressed debt vehicle.

Non-private equity fund investments included Florida’s first infrastructure commitment, pledging $150 million to Global Infrastructure Partners II, and a $50 million commitment to real estate fund Brookfield Fairfield US Multifamily Value Added Fund.

The system committed a total of $1.25 billion across alternative strategies during the third quarter of the year.

Florida has a 5 percent target allocation to private equity and a 5.2 percent actual allocation, as of 31 August. The system’s target allocation to strategic investments, which includes strategies such as debt, real estate, infrastructure and hedge funds, is 4.7 percent, less than half of its 11 percent target.

Last month, Florida purchased a minority interest in Providence Equity Partners, according to a source with knowledge of the situation. Providence recently sent a letter to investors stating that two of the pension’s “longstanding limited partners” recently purchased a minority stake of less than 10 percent in “Providence’s management company and related entities”.

Earlier this year Florida replaced its long-time head of private equity, Jim Treanor, with two people: Trent Webster, senior investment officer – strategic investments and private equity, and John Bradley, director of private equity.