Florida Retirement System PE investments lead returns

The pension plans’ PE portfolio returned 14.61 percent.

The Florida Retirement System Pension Plan (FRS) reported that its private equity investments earned the most returns of all of its asset classes at 14.61 percent for the fiscal year ending 30 June, according to preliminary investment performance figures released by the State Board of Administration.

PE returns were trailed by real estate at 11.92 percent, strategic investments at 6.77 percent, fixed income at 1.99 percent and global equity at 1.92 percent.

However, PE returns were lower than the previous year when its PE portfolio generated 19.88 percent.

The pension plan generated returns of 3.67 percent overall, beating its benchmark by 143 basis points and ending the year with a market value of $148 billion. This marks the retirement system's sixth year of positive returns since the financial crisis, the SBA, which manages the retirement system, said in a statement.

The FRS's returns resonate with Pantheon's July study that noted private equity outperformed the public market benchmarks over the span of 16 years, as previously reported by Private Equity International.

The system currently allocates 5.9 percent of its fund to private equity, SBA spokesman John Kuczwanski told PEI, just short of its 6 percent target. He said there had been no changes to the PE target allocation in the past year. 

In the four quarters from 1 April 2014 to 31 March 2015, FRS committed around $2.7 billion to 26 private equity funds, including a £100 million investment.

In the first half of this year, the SBA, which provides investment services to a number of Florida State institutions, invested over $1 billion in private equity and strategic investments, including $180 million to Blackstone Capital Partners VII and $200 million to Oaktree Opportunities Fund XB, according to PEI's Research & Analytics division.

The SBA manages $185.3 billion in assets as of 29 April 2015, according to Kuczwanski.