By Russell Read and Steve Moseley

“The State of Alaska is rightly known for its frontier spirit and fierce independence. So it may be surprising to some that we at the Alaska Permanent Fund Corporation attribute strong recent performance in part to the vigour with which we have pursued a strategy of teaming up with outside partners across our $65 billion portfolio. This strategy leverages our institutional strengths (clear mandate, patient capital) and mitigates our weaknesses (small staff, remote location). Partnership is among the most overused (and, too often, abused) terms in asset management. For Alaska, the term has central importance and refers to three categories of partners: fund managers, specialised advisers, and institutional peers. …

… The first category, partnerships with talented fund managers, relies on a critically important task: identifying capable external managers with differentiated skills and sustainable competitive advantages. We seek to team up with these managers to design and implement initiatives that meet their institutional objectives and ours.  …

… The second category of partnership is with specialised advisers and consultants, to leverage our internal team, improve deal flow, and enhance our due diligence and transactional capabilities. This category includes investment consultants and outside counsel, plus more specialised advisers that offer skills or intellectual capital that complement our internal resources. …

… The third category of partnership has the potential to be the most powerful and impactful: joining with like-minded institutional investors to pursue important strategic or tactical initiatives. Many institutional investors believe they are competing with their peers for a finite pool of alpha – and this is sometimes the case; however, there are also several areas where common challenges, common goals, and complementary resources create opportunities to join together and create tremendous value for all participants. …

… The spirit of independence is alive and well in Alaska. We believe that the best outcomes follow from an honest assessment of one’s own capabilities and a clear-eyed view of the obstacles ahead. It is our mission to continue to deliver attractive returns for the benefit of all Alaskans and we intend to do that not by chipping away at the fees we pay along the way, but by teaming up with capable partners for the long journey ahead.”

Full opinion piece is available at Top 100o funds.

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The APFC Board of Trustees will hold a special telephonic meeting on Tuesday, July 24, 2018.  The agenda is focused on a discussion pertaining to personnel and is posted below, as well as on the BOT meetings page.

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The Alaska Permanent Fund Corporation (APFC) announced today that Russell Read, CFA, Ph.D. has resigned from his position as Chief Investment Officer.  Having served as a respected member of APFC’s Executive Team since May of 2016, Russell is leaving to pursue an opportunity based out of London.

Russell remarked that “being a member of APFC’s team during such a pivotal and dynamic time for the Alaska Permanent Fund has been a novel experience and one I am proud to have been part of.  The new opportunity I am pursuing will match my global markets leadership skills with my years of CIO expertise.”

Angela Rodell, Chief Executive Officer, stated in appreciation “on behalf of the Board of Trustees and APFC Staff, we want to thank Russell for his service to the State of Alaska.  Russell brought not only his institutional knowledge and experience to APFC, but also his passion and creativity to evolving APFC’s global standing and portfolio.”

“Russell has made valuable contributions to the Fund through his vision and dedication to build upon the foundation of the Corporation’s long term investment strategies and governance” noted Board of Trustees Chairman, Bill Moran. “We wish Russell well in pursuit of his new endeavors and are well poised to continue our stewardship of the Alaska Permanent Fund on behalf of Alaskans.

Marcus Frampton, CFA, CAIA has been appointed as the Acting Chief Investment Officer.  He has been with APFC since 2012 and served admirably as the Director of Investments, Real Assets & Absolute Return. Prior to joining APFC, Marcus held diverse roles ranging from investment banking (Lehman Brothers), private equity (PCG Capital Partners), and as an executive of a private equity backed portfolio company (LPL Financial). Mr. Frampton holds a BA in Business-Economics with a minor in Accounting from UCLA.

CEO Angela Rodell will be working with the APFC Board of Trustees to guide the search process for the CIO position.

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The Alaska Permanent Fund Corporation (APFC) is pleased to announce that it was awarded the recognition as Sovereign Wealth Fund of the Year in Hedge Fund Investments for 2017 at Institutional Investor’s Hedge Funds Awards Ceremony in New York City on Thursday, June 28.  This event marks the second award for APFC’s industry leading investment capabilities after PEI awarded APFC its designation as North America’s Private Equity Institutional Investor of the Year for 2017 this past March.

Angela Rodell, Chief Executive Officer, notes “I am so proud of this group and the international recognition that they received. The Institutional Investor Award reflects the hard work and success of APFC’s hedge fund investment team, which steered the program away from fund-of-funds investments to direct investments into hedge funds two years ago.”

This recognition of APFC’s hedge fund program represents a successful milestone in the reconstitution of the program that began in early 2016.  At that time, APFC Staff with support from our hedge fund consultant, Albourne Partners, and oversight from APFC’s Trustees put forth a new vision for the program.  APFC implemented insourcing of hedge fund selection and portfolio construction that previously was performed by external fund-of-fund partners.  The strategy was further focused in favor of truly uncorrelated managers. Since that time, the new direct hedge fund effort has resulted in significant fee savings and has achieved the stated objective of earning a real return of at least 500 basis-points with minimal correlation to traditional asset classes.

Marcus Frampton, Director of Real Assets & Absolute Return, comments “It took a real team effort to bring an external fund-of-funds approach to hedge funds in house with significant contributions from Legal, Finance and our Investment Team broadly.  It is gratifying to receive this recognition from Institutional Investor less than three years into our new program, however, the real benefit to APFC is the asset allocation flexibility that is provided from having a focused, uncorrelated absolute return program that has the potential to earn attractive returns in a variety of market environments.”

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The Alaska Permanent Fund Corporation (“APFC”) is pleased to announce the launch of a $1,000 million hybrid credit effort named Alaska Direct Alternative Credit (“ADAC”).  Investments in ADAC will include a liquid portfolio of internally managed non-investment grade bonds and ETFs, and a private portfolio of co-investments alongside APFC’s private credit managers. ADAC and the private portfolio will be managed by the Private Income team, including Director Marcus Frampton and Senior Portfolio Manager Jared Brimberry.  The liquid portfolio will be managed by the Fixed Income team, specifically Director Jim Parise and Senior Portfolio Manager Matt Olmsted. …

…“The publicly traded non-investment grade bond portfolio will be managed by our internal fixed income team with the goal of providing a more liquid proxy to the private portfolio, allowing them to be more selective in their co-investments,” said Jim Parise, Director of Fixed Income. “Our long-term track record of outperforming our benchmarks and peers over many market cycles should translate to helping the overall ADAC portfolio achieve its performance goals.”

“The private portfolio within ADAC represents another example of the APFC using its’ scale, strategic external partnerships, and in-house expertise to create a compelling investment opportunity,” said Jared Brimberry, Senior Portfolio Manager. “We are excited to build a diversified credit portfolio alongside top-tier managers, with the benefit of removing an additional layer of fees.”

20180531_Alaska Direct Alternative Credit

The Board of Trustees held their quarterly meeting in Anchorage, Alaska on May 23-24, 2018 to review the Alaska Permanent Fund’s performance as of March 31, 2018 and consider APFC’s comprehensive investment policy and asset allocation.

The Alaska Permanent Fund’s (Fund) investments gained 8.86% thru the third quarter of fiscal year 2018 (FY18) and the Fund ended March 31, 2018 with assets under management totaling $64.6 billion. Overall the Fund has performed favorably over the long term, returning 8.35% over the last 5 years and 6.52% over the last 20 years.

Chair Moran noted that “the Fund has benefited from having strong governance practices in place that provide long term discipline and a structure that allows for APFC to identify and respond to targeted opportunities and risks within a shifting global financial landscape.”

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The Alaska Permanent Fund Corporation will hold its Quarterly Meeting of the Board of Trustees on May 23-24, 2018 . The public is invited to attend this meeting in-person or via teleconference,  and there will be an opportunity for public comment and participation on Wednesday, May 23^rd at 8:30 a.m. when the meeting commences.

The meeting agenda is available under Board of Trustee Meetings and the packet will be posted a day in advance of the meeting.  Agenda items include: a panel on investing with environmental, social and governance (ESG) factors, comprehensive overview of asset class performance by Callan and APFC portfolio managers, consideration of the updated Investment Policy, and a presentation by Callan on the current capital market assumptions.

The Alaska Permanent Fund Corporation applauds the passage of SB 26. The Board of Trustees with Resolution 18-01 had implored the Legislature to take the difficult action of setting up a rules-based framework governing withdrawals from the Alaska Permanent Fund. SB 26 fulfills that obligation.

Angela Rodell, Chief Executive Officer, affirms that “SB 26 is an important milestone for the Permanent Fund and APFC.  It gives us the target we have been asking for in order to craft our investment strategy and will ensure the Fund is a resource Alaskans can rely on now and in the future.”

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The Alaska Permanent Fund’s (Fund) investments gained 8.86% thru the third quarter of fiscal year 2018 (FY18) and the Fund ended March 31, 2018 with assets under management totaling $64.6 billion. The value of the Fund is up $4.8 billion since the start of FY18 despite increased market volatility. …

The value add that APFC staff has contributed through the active management of the Fund is a 1.65% return above the passive index benchmark thus far in FY18, which is equal to just over $986 million in Fund value. …

Download the release at 201805_APFC FY18 Q3 Performance.

“The $65bn Alaska Permanent Fund is creating a supercharged private equity portfolio, writes Alex Lynn” …

“…This is the ultimate model of having a small team of very thoughtful people leveraging their GP network constructively to generate some really interesting dealflow, executing on it and delivering good returns.  They use their resources where they see the opportunity and just get things done – not many people execute and execute well. …”

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