Maybe you really can go home again. And maybe you’ll be met with open arms. And maybe you’ll even get a handsome salary. That’s what’s happening in Tallahassee, where Ashbel Williams Jr. is being embraced by the Florida State Board of Administration as the prodigal hedge fund son returned. The agency oversees the $130 billion Florida Retirement System, the fifth-biggest pension fund in the U.S. Williams ran the board from 1991 to 1996 before he decamped to Manhattan to pursue greater fortune. After a stint as president of Schroder Capital Management, which was then a unit of Schroders, the $190 billion global investment firm based in London, he joined New York–based hedge fund firm Fir Tree Partners as managing director of investor relations. During Williams’s tenure at Fir Tree, its assets grew to $5 billion from $450 million through a value-oriented strategy that took a long-term, opportunistic approach that included activism. Williams, 53, is expected to be preaching the gospel of hedge funds when he takes over again as executive director of the board. Until now Florida’s giant pension fund has had nary a one, and Williams says it’s time the dry spell ended.
“I’ve learned a lot about capital-structure arbitrage, all kinds of distressed investing and just taking advantage of a very wide range of opportunities in a very holistic way,” he says, adding that his goal is to steer Florida to “where there’s the highest probability of adding alpha.” He will add investments in commodities and in privately operated infrastructure projects like bridges and highways.
In December, Williams’s predecessor, Coleman Stipanovich, resigned after the subprime mortgage meltdown triggered a run on the board’s internally managed Local Government Investment Pool, one of the 33 funds run by the state agency. Local governments withdrew some $20 billion, about two thirds of the assets, before the fund was frozen. Williams will make $325,000 a year (and a bonus of up to 8 percent of his base salary), almost certainly less than he was making in the Big Apple but a notable increase over the $182,000 Stipanovich was paid.
Florida is unusual among big state pension funds in that as much as 40 percent of its assets are managed internally, a feature Williams finds appealing. “In the financial world,” he says, “the opportunity to act decisively is two thirds of the battle — something that’s commonly lacking in public funds.”
