Florida State Board of Administration, Tallahassee, was directed by trustees today to issue an RFP for investment management firms for its $14 billion internally managed local government investment pool, which will be restructured because at least $867 million of its securities are in default and another $1.2 billion is subject to potential losses because of their use of subprime mortgages and other troubled financial assets as collateral. BlackRock, which trustees hired to advise on the restructuring, was named interim manager of the pool for 90 days in expectation that the search process will be completed by then. No further details about the RFP were available.
The pool is expected to open for limited withdrawals Thursday, Chris Stavrakos, BlackRock managing director and co-head of cash portfolio management, said at the meeting of SBAs trustees Gov. Charlie Crist, Chief Financial Officer Alex Sink and Attorney General Bill McCollum. The pool was closed to withdrawals Nov. 29; it was valued at $27.3 billion on Sept. 30 and fell to $14 billion Nov. 29, in part because of withdrawals.
The pool will be split into two funds. Fund A will invest $12 billion in high-quality money market instruments, and Fund B will consist of the remainder of the assets, which are securities in default, impaired or present significant credit risk.
Also at the trustees meeting today, Coleman Stipanovich resigned as executive director of the state board. Mr. Stipanovich has been executive director for seven years. Mr. Stipanovich said he would discuss a timetable for his departure with SBA trustees. Nothing was said about naming an interim executive director or initiating a search for a replacement.
The board oversees a total of $187.5 billion, including $138 billion in pension fund assets.