04/03/2010 Author: Kapila Gohel

Florida SBA hires first hedge funds in activist space

The $138.6bn Florida State Board of Administration (SBA) has made its first investment in hedge funds and is already on the lookout for more managers.

SBA has hired four activist hedge fund managers; Cevian Capital, Monaco-based Knight Vinke, P2 Capital and Ramius Capital, allocating around $50m -$100m to each manager since the beginning of the year, Kevin SigRist, deputy executive director, announced during the investment advisory council’s (IAC) meeting today.  

The new investments are part of SBA’s corporate governance activist mandate that is part of the strategic investments allocation, which also houses SBA’s hedge fund allocation.

SBA is yet to make any investments as part of its designated hedge fund allocation, however, SigRist added the council is also working with its investment advisor Cambridge Associates to develop a ‘forward calendar of hedge fund managers for inclusion in a diversified model portfolio’ for its multi-sector/hedge fund strategies allocation.

IAC expects to review hedge fund managers for the allocation in June. Executive director CIO, Ash Williams said SBA is likely to steer clear of highly levered hedge funds stating Cambridge Associates ‘doesn’t like’ global macro and quant funds.

SigRist further stated that transparency is “one of the hallmarks of institutional quality hedge funds” and informed the IAC that Cambridge has a strong operational due diligence team.

SBA has a 10% allocation to alternatives and according to its universal asset allocation plan compiled by Ennis Knupp, absolute return hedge funds have a 2.3% allocation and long/short equity hedge funds have 3.9% allocation.