A significant secondaries sale was largely responsible for the record $1.2 billion net cashflow that private equity returned to Florida State Board of Administration last year, pushing the since-inception distributions to paid-in capital ratio to 1.0x.
That’s a milestone for any private equity programme, John Bradley, senior investment officer for the asset class, said at a 26 March investment council meeting. The pension system received back one dollar for every dollar in contributions, he noted.
Florida SBA sold a $1.3 billion PE portfolio to Ardian last year, sister publication Secondaries Investor reported. The pension system views secondaries as a diversifier and J-curve mitigant, and uses the secondaries market to reposition and rebalance its portfolio, Bradley told Secondaries Investor in September.
As a whole, Florida SBA’s investment portfolio returned 19.7 percent over one year, 15.8 percent over three years, 16 percent over five years, 12 percent over 10 years and 9.7 percent since inception in 1989, as of 30 September.
Florida SBA’s private equity portfolio includes buyouts, co-investments, growth equity, distressed and secondaries. The pension has 68 GP relationships and is invested in 184 funds. Of these, 48 GPs are core ongoing relationships, according to pension documents. Last year, the pension system committed $1.86 billion to 16 funds. Within its $12.43 billion private equity portfolio, growth strategies led the performance, delivering 24.4 percent over one year, 16.3 percent over three years, 18.6 percent over five years, 15.4 percent over 10 years and 14.1 percent since inception, as of 30 September.
More than 70 percent of the pension system’s buyout commitments are to sector-focused private equity firms, including Silver Lake, Thoma Bravo and ABRY Partners in middle markets, and Accel-KKR and Rubicon Technology Partners in small buyouts, according to pension documents.
Buyouts, including co-investments, account for the largest share of the private equity portfolio (66 percent), followed by venture capital (16 percent), distressed (12 percent) and secondaries (6 percent). Large funds represent 30 percent of the buyout portfolio allocation, with mid-market and small-market funds each making up 35 percent.
The pension fund invests in venture capital through its four separately managed account and fund-of-funds relationships with TrueBridge, Silicon Valley Bank, Fairview Capital and Tiger Iron Capital.
Florida SBA’s investments are primarily US-focused (58 percent), followed by Europe (16 percent), Asia (3 percent) and global (24 percent).