Taking a little less liberty with Florida's pension fund
By HELEN HUNTLEY
Published November 10, 2003
The Florida pension fund is sticking with its controversial plan to put up the money to take Edison Schools private, but the deal could turn out to be the last of its kind.
The State Board of Administration, which runs the pension fund, is renegotiating its contract with Liberty Partners, the money manager that put together the Edison buyout. Future investments in private companies are expected to be considerably smaller and to be limited to equity investments, rather than combining equity and debt.
Liberty, which has headquarters in New York, manages about $1-billion for the $95-billion pension fund's "alternative investments" category. The Florida pension fund is Liberty's only client. In that role, the fund will put up most of the $182-million price tag for Edison schools, a company that contracts with school boards to run public schools.
The state board has told Liberty that it wants to limit the size of future investments to 20 percent of the total value of the deal, or $60-million, rather than the current $250-million limit. Lower limits lead to a greater number of investments, diversifying the portfolio and reducing risk. A consultant to the board has criticized Liberty for taking too much risk with an inadequately diversified portfolio.
Edison shareholders are scheduled to vote on the buyout Wednesday. Some object, saying the price is too low.
