APFC’s Board of Trustees Regular Meeting Overview

In Uncategorized by Paulyn

Anchorage – The Board of Trustees held a regular meeting in Anchorage and via webinar on April 12, 2023, to hear updates on portfolio activity, further conversations on the Fund’s Asset Allocation and the in-state private equity investment program, review elements of the Public Equities portfolio, and consider the Corporation’s peer group definition for compensation.


Financial results for the first two months of the calendar year reflected significant volatility in the public equity market, which gained $2 billion in value during January, only to lose $847 million in February for an overall return for the period of 4.6%. Small losses were experienced in the other asset classes, with the overall portfolio gaining $857 million in the two months ending February 28, 2023.

APFC’s Director of Public Equities, Fawad Razzaque, led a review of the Fund’s largest asset class, including its positioning versus benchmarks, external and internal management activities and performance. As recognized by Trustees and Advisors, the active and internal tactical tilt management of this portfolio is bringing forth outstanding results and returns for Alaska. Further context on the public equity space was provided by Richard Bernstein Advisors (RBA), an external investment manager presenting on long-term strategies, including their top-down macro research-driven approach to portfolio management.

As directed by the Board of Trustees through Resolution 18-03, APFC launched the Alaska Investment Program in 2019 and selected two external fund managers to execute an Alaska-focused private markets investment program with an allocation of $200 million. The $100 million commitments to external managers McKinley Capital Management, LLC and Barings, LLC, are now fully deployed in more than 20 investments. Just a few years into the program, these In-State program investments are still considered to be in the early stages of the private market lifecycle. In Resolution 23-01, adopted during the meeting, the Board recognized the importance of allowing investments within the program to continue under the normal course of business to realization or other disposition event. However, the Board re-assessed the wisdom of expanding or continuing the Alaska In-State Emerging Manager Program and resolved not to allocate additional capital to this program.

Further Board discussion was held with the Chief Investment Officer and the Chief Risk Officer on the Permanent Fund’s Asset Allocation. The Board and staff will continue to work through risk and benchmarking analysis to bring forth a recommendation for the Board’s consideration and adoption as part of the Investment Policy at the next Quarterly Meeting in May.

At a previous Board Meeting, staff was directed to work with an outside firm to objectively analyze potential compensation peer groups that reflect the competitive labor environment in which APFC competes for talent and identify the most accurate compensation benchmark for APFC’s staff. Following a discussion with staff and the contracted firm, the Board requested staff to further develop the compensation structure based on the updated data for review and consideration at the upcoming May meeting.

The Board also received an update on current Legislative activities related to the Permanent Fund and the Corporation from APFC’s Director of Communications. Realized (statutory) net income year-to-date of $1.2 billion from investment activities remains lower than Callan’s mid-point projection of $4.6 billion. These earnings flow into the ERA and are available for legislative appropriation to provide for Inflation Proofing the Principal and for the Percent of Market Value annual draw to support the State’s essential services and programs, including the dividend program.

Ken Frier, a member of the APFC Investment Advisory Group (IAG), presented perspectives and strategies for portfolio management.

The next regular meeting of the Board of Trustees will be the quarterly meeting on May 17-18, 2023, in Kenai-Soldotna and via WebEx. Meeting information can be found at https://apfc.org/the-board-of-trustees/board-of-trustees-meetings/.

Archived video recordings of all Board of Trustees meetings are on our website at https://apfc.org/bot-video-archive/.