The $116 billion Florida State Board of Administration plans to diversify its private equity portfolio by gradually adding venture capital and distressed debt funds of funds. The plan has set 5% of its overall portfolio aside for alternatives. Mike McCauley, spokesman, said the fund has only fulfilled about 3.6% of its target and so far, more than 95% of this is invested in large buyout funds. The plan recently had an education session with consultant Hamilton Lane Advisors to discuss private equity and it decided that venture capital and distressed debt fund of funds will be good areas in which to seek diversification and returns.
McCauley said the fund will also discuss the possibility of adding hedge funds, although cost, lack of transparency and “where to put them,” are currently deterring the board.