The State Board of Administration of Florida (SBA) has made a combined $250 million commitment to two Asia-focused funds in the second quarter of this year, it disclosed in an update.
The investments include a $100-million commitment to North Asia-focused private equity (PE) fund MBK Partners V, which held a final close at $6.5 billion in May.
Headquartered in Seoul, South Korea, MBK Partners focuses on investments in South Korea, Japan and China.
Its fifth buyout fund had earlier secured capital commitments from other US pension funds, including Illinois Teachers’ Retirement System, Virginia Retirement System, San Francisco City & Country Employees’ Retirement System, New Jersey State Investment Council, Los Angeles County Employees Retirement Association, Texas Employees Retirement System and Ohio Police & Fire Pension Fund.
MBK Partners’s four predecessor funds had raised a total of $10.5 billion.
The Florida SBA’s other commitment was a $150 million allocation to PAG Asia Loan Fund IV.
PAG Asia’s fourth loan fund is a new relationship for the SBA. We reported last year that the Hong Kong-headquartered PE firm was seeking to raise $1 billion for the subordinated capital vehicle.
PAG’s latest loan fund had earlier received a $100 million commitment from the San Francisco Employees’ Retirement System. The fund’s predecessor, Asia Loan Fund III, was oversubscribed and hit its hard cap of $950 million in 2018.
In total, the SBA made approximately $3 billion commitments in 18 funds during Q2 2020, including 200 million euros ($235 million) to CVC Capital Partners VIII, $200 million to Lexington Partners and $175 million to Silver Lake Partners VI.
The SBA is mostly responsible for investing the proceeds of the Florida Retirement System Investment Plan, as well as proceeds of more than 25 other funds directed to it by the Florida Legislature.
Since the third quarter of 2019, the pension fund has ramped up its Asia investments, with funding in Asia Alternatives Capital Partners’ third fund-of-funds, Hahn & Co III and China-focused firm Yiheng Capital totalling $500 million.
By April 2020, the SBA managed a total of $200.4 billion in assets. Its largest fund under management, the Florida Retirement System Investment Plan, saw an 8.1 per cent PE allocation, compared to an upper target of 9 per cent.
The PE return from the start of 2020 until April stood at 2.37 per cent, while it had been 15.78 per cent for the 12 months ending April 2020.