Insight
Fiduciary Duty Must Trump Political Divestment Mandates For Pension Managers
“Listen, we really need to separate the fiduciary duty and the political policy as it relates to health and dangerous products like cigarettes, because I can't really hold a manager accountable for beating the S&P 500 and then tell him he can't own one of the f…”
Assertion Supported
Tobacco Divestiture Cost Florida $500 Million and California Billions
“One of the consulting firms did an analysis of the impact of tobacco divestiture on public funds. I think Florida's piece of that cost about five hundred million bucks. I think California was a couple of billion.”
Insight
Securities Lending and Index Reconstitution Trades Consistently Beat Passive Benchmarks
“Through a combination of SEC lending and playing the names that the index providers signal in advance are going to be added to or taken out of the index, doing those two things will get you enough marginal revenue that you can beat the index pretty consistentl…”
Assertion Supported
Florida SBA Claims Credit for Reversing Airbnb's Disputed Territories Policy
“We engaged Airbnb. They have done a one 80 on the policy that they were pursuing in the disputed territories. It was announced publicly about two weeks ago.”
Assertion Not checkable as stated
Florida SBA Bought Cheap Secondaries From Cash-Strapped Endowments During 2008
“So there were lots of very prestigious institutions, endowments and what have you, who were longer illiquid investments, and particularly those subject to capital calls, than they realized they were. And they got in a liquidity pinch In late oh eight, early oh…”
Opinion
Tactical Asset Allocation is a Bad Strategy That Failed Miserably
“What was tried in the eighties and to a degree in the nineties that failed miserably was the idea of making active judgments and jiggling around the tactical asset allocation as people now call it. Just a bad idea.”
Insight
Active Management Outperforms Passive Indexing in Emerging and Frontier Markets
“As you move out of the U.S. Into non-U.S. Equities, and the further afield you go into emerging markets and eventually into frontier markets, then the attractiveness of active versus passive becomes compellingly active.”
Assertion Contradicted
Florida's $34 Billion Cash Pool Faced 80% Redemptions in 48 Hours
“In about 48 hours, the cash pool of the SBA, which is a, like I said, about a thirty-four billion dollar pool, received redemptions for something on the order of 80% of its assets.”
Assertion Partly supported
Florida SBA's 2007 Cash Pool Held Under 3% Illiquid Assets
“The proportion of the illiquid assets was tiny. It was less than three percent. It was not life threatening. It was not really even material to the size of that pool, given a normal liquidity environment.”
Insight
Politically Governed Pension Funds Face Systematic Resource and Compensation Suppression
“If you're under a state legislative body, any politically derived body, chances are you're going to be suppressed for compensation, for resources, including travel, training, materials, systems, risk controls. Everything.”
Insight
Pensions Hold Fixed Income for Crash Liquidity, Not for Yield Returns
“It's not to get the marginal negative three percent. It's there because if the bottom falls out of the equity market, There will be a flight to safety, which will be fixed income. That will be the liquid asset that will be appreciated at the time, and you can …”
Disclosure
Florida SBA Will Never Adopt the Canadian Pension Direct-Investing Model
“Well, we are not in a position to do transactions directly other than our real estate area, and I don't think we ever will be. That's the province of the Canadian model, and you're just never going to see that here.”
Assertion Not checkable as stated
State Laws Give Florida SBA Superior Legal Terms in PE Contracts
“I think the majority of them we would have some superiority in terms, and the reason I think that's a pretty safe statement is there's some things that are required under Florida law that are inconsistent with most GP's documents. So, for example, one thing we…”
Disclosure
Florida SBA Manages 60% of Its Real Estate Directly With No Leverage
“To this day is a unique model in that we manage about 60% of that book, or a little over half, in what we call our principal portfolio, which means we own the properties directly, and we manage them ourselves, and we often have them with not a great deal of le…”
Assertion Contradicted
Florida SBA Operates at Half the Cost of Institutional Peers
“We have been the lowest cost provider for three or four of the last five or six years per CEM. Our costs on average are about half those of our peers.”
Assertion Partly supported
Florida SBA Must Fund $700 Million in Negative Monthly Cash Flow
“We have negative cash flow to the tune of seven hundred million or thereabouts a month.”
