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Florida commits $400 million to real estate and infrastructure

by Andrea Waitrovich

The $157 billion Florida State Board of Administration has committed $400 million to real estate and infrastructure.

The board invested $100 million in Starwood Opportunity Fund IX, an opportunistic real estate fund managed by Starwood Capital Group. Starwood Distressed Opportunity Fund IX launched in August 2011 and is expected to close with almost $3 billion in equity at the end of 2012.The fund focuses predominantly on distressed opportunities in the United States but will be able to invest between 20 percent and 30 percent in Europe, with a further 10 percent to 20 percent targeting Brazil and India. Recent investors include the Los Angeles Fire and Police Pensions, Illinois Municipal Retirement Fund, and New York State Teachers’ Retirement System.

The Florida State Board of Administration also committed $300 million to IFM Global Infrastructure, an infrastructure fund managed by Industry Funds Management (IFM). IFM Global Infrastructure is an open-end commingled fund with approximately $11 billion in assets. The fund targets developed markets around the world, including Australia, Europe and the United States, and invests in core infrastructure assets — those with strong market positions, high barriers to entry, limited demand elasticity and long lives, including mass-transportation systems, waterways and airports. Other investors include the Virginia Retirement System.

The Florida State Board of Administration has approximately 7 percent of plan assets invested in real estate. Its portfolio consists principally of direct-owned real properties, real estate joint ventures, open- and closed-end funds, and publicly traded real estate securities.

The board created its infrastructure allocation in 2010 with a target allocation of 2 percent. In October 2012, it made its first infrastructure commitment with a $150 million commitment to Global Infrastructure Partners II.

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