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“How to make a 29.46% Investment Return” | Florida’s Chief Investment Officer Ash Williams | November 1, 2021

“Don’t start the pity party of saying ‘I’m just an individual. I can’t do hedge funds, I can’t do private equity, I can’t do distressed, I can’t do all these countercyclical, pro-cyclical things that would be constructive in an aggregate portfolio.'”


Florida’s outgoing Chief Investment Officer Ash Williams explains the state pension system’s phenomenal returns and shares his keen insight on the present and future financial markets, before a November 4, 2021 meeting of The Economic Club of Florida.

Show notes

Ash Williams, who shepherded Florida’s public pension system for the past 13 years before his own retirement last month, went out with a bang – earning the fund a 29.46% return on investment over the previous 12 months.  How did he and his team of 220 professionals do it?  Williams credited several factors, including robust public and private equity, venture capital, real estate, and other private asset markets, coupled with exposure to markets that appreciated most.  But it’s also in the execution, he said.

“Even if everything’s going great, if you don’t have the ability to properly capture the returns, you won’t benefit from them.  And we have an outstanding professional team of talented, experienced portfolio managers and many others who know how to get the job done right, especially in a public environment with a high degree of transparency and accountability,” said Williams, whose family has lived in Florida since the early 1800’s, before it was a state.

As former Executive Director & Chief Investment Officer of the State Board of Administration (SBA), Mr. Williams was responsible for managing over $250 billion in assets including those of the Florida Retirement System, the fifth largest public pension fund in the United States, with one million participants.  The SBA manages multiple investment mandates, including the defined benefit and defined contribution retirement programs and the Florida Hurricane Catastrophe Fund.

Over the 13 years, the SBA had an annualized return of 10.33%, which is about 90 basis points (9/10 of 1%) ahead of target.  That amounted to more than $15 billion in value added beyond what the markets provided.  He and his team beat expectations, even in bad economic times, under their belief in long-term investing.

“As institutional investors, a substantial part of our return is always going to be what the markets did in a given period of time.  The reason is, we manage risk very carefully, and you never get too far away from the markets that are your primary drivers of return for the simple reason that if you make a huge bet like that, and you’re wrong, you can do a tremendous amount of damage,” said Williams, who returned to the SBA in 2008 after working for private capital firms in New York City.

He acknowledged that how the SBA invests is different than how individuals invest but said some of the same options exist in both worlds.  “Don’t start the pity party of saying ‘I’m just an individual. I can’t do hedge funds, I can’t do private equity, I can’t do distressed, I can’t do all these countercyclical, pro-cyclical things that would be constructive in an aggregate portfolio,’” he told Club members.

Williams also shared his thoughts on individuals facing a choice of using independent financial advisory firms versus traditional investment management firms.  “I don’t think you can automatically say that one is better than the other.  I think the most important thing is the character of the individuals you are dealing with.”   He stressed it’s also important to know how the broker or advisor is compensated and whether they are a fiduciary, someone that is legally obligated to put the interests of the investor ahead of their own.  “That’s critical,” said Williams.

Williams was recently elected to the Council on Foreign Relations, which he said provides a rich field of daily information on events all over the world – something that “without a doubt” has made him a better investor.  “One of the things I’ve absolutely loved about my career in the investment field has been that what it’s really about is understanding how economies fit together around the world, understanding how different companies in different industries’ business models work, which ones make sense which ones don’t.  And then fusing that understanding… into an actionable plan of where change will come and who’s likely to benefit and who’s likely to be heard.”

Links and Resources Mentioned in this Episode

The Economic Club of Florida podcast, provides an extended platform for discussion to educate, engage, and empower citizens on important economic, political, and social issues. Based in Tallahassee, Florida, the Club has featured distinguished speakers on engaging topics of national importance since 1977. To learn more, including how to become a member, visit www.Economic-Club.com or call 850-224-0711 or email mail@economic-club.com.

Date of recording: 11/04/21