With an eye toward reducing risk and increasing returns, the Florida State Board of Administration last week voted to revise investment strategies at the country’s fourth-largest public pension fund and to invest in infrastructure projects, including airports and roads.

Infrastructure will be included in the strategic investments category, which includes hedge and debt-oriented funds.

The SBA board revised its policies to allow up to 6% of assets to be invested in strategic categories in the interim while legislative approval is sought to increase the target allocation to 11%.

The guidelines aim to generate long-term returns in excess of a 5% annualized real rate of return, commensurate with risk while diversifying pension plan assets, providing hedges against inflation, and increasing investment flexibility.

Currently, the SBA invests 37.4% of the pension fund in domestic equities and 20% in foreign equities.

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