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Florida eyes US, European secondaries funds

The Florida State Board of Administration, a frequent investor in secondaries funds, may also buy and sell LP stakes directly, according to its 2014 investment plan.

Investing in North American and European secondaries funds are a “medium priority” for the $178 billion Florida State Board of Administration, while secondaries funds in Asia and throughout the rest of the world are a “low priority”, according to documents from the pension’s June board meeting.

North American and European secondaries funds were noted to be more important for the Florida SBA because it either feels it does not have sufficient exposure to those secondaries markets, or also considers market conditions attractive.

In the past, the Tallahassee-based pension has backed a number of large-cap and middle market US secondaries funds.

During the first quarter of 2014, Florida committed $200 million to Lexington Partners’ Fund VIII, which launched earlier this year with an $8 billion target, Secondaries Investor reported. Florida also committed $150 million to Ardian’s Secondary Fund VI, which collected $9 billion in April, surpassing the record-setting $8 billion that Ardian’s prior secondaries vehicle raised in 2012.

Last year, the pension also committed to Lexington Partners’ Middle Market Investors Fund III, which raised $1.05 billion, according to data from Secondaries Investor’s sister publication Private Equity International.

Florida’s current allocation to secondaries funds is 5.6 percent of its private equity portfolio, according to the documents. Its target allocation is 12.5 percent, which is the same for growth equity funds and distressed funds.

Florida also expects to continue to review secondaries opportunities as both a buyer and seller of fund interests, according to the board meeting documents. In October 2013, Florida completed a “successful” sale of legacy private equity funds.