Florida State Board of Administrations Local Government Investment Pool would return to internal management under a tentative recommendation by consultants evaluating the $10 billion pool, according to Kevin SigRist, deputy executive director of the $187.5 billion FSBA. The potential cost saving of such a move was described to be on the order of $600 million over 30 years, Mr. SigRist said in a memorandum. The memo said the FSBA hasnt prepared a definitive analysis on costs.
The recommendation was made by Tanya Styblo Beder, chairman of SBCC Group, a risk management consulting firm, and Thomas Tew, attorney with the law firm of Tew Cardenas. Both were hired in February by the Florida House as part of its special task force evaluating the Local Government Investment Pool. Mr. SigRist wrote his memo to Ms. Beder and Mr. Tew.
The consultants also recommended creating a new local government investment pool and closing the existing pool to new deposits, the memo said. Mr. SigRist based his response on a presentation of the recommendations at a meeting, noting in his memo we have not been provided with any written documentation of the analysis.
Federated Investors was hired, effective March 1, to manage the $8.7 billion Local Government Investment Pool A and $1.5 billion Pool B. It took over from interim manager BlackRock, which was hired in November. Before then, the pool was internally managed by the SBA and had some $30 billion in assets before reports of subprime credit-related investment problems caused a run of withdrawals last fall.
Jill Chamberlin, communications director of Florida House Speaker Marco Rubio, said the Beder/Tew report wont be available until next week. Michael P. McCauley, senior corporate governance officer and SBA spokesman, couldnt be reached for comment.