APFC Statement Regarding U.S. Technology Banking Sector

In Uncategorized by Adam Kane

Last week, U.S. banking regulators closed Silicon Valley Bank, a bank that specialized in commercial banking for the technology sector. Over the weekend, federal entities took measures to ensure that the depositors of Silicon Valley Bank would be held harmless. At this point, a handful of additional banks are experiencing substantial distress or have also been closed by banking regulators. These banks include Silvergate, Signature Bank, and First Republic.

The Alaska Permanent Fund Corporation has exposure to these banks in the form of passive investments in index funds. As of December 31, 2022, the market value of these investments totaled $7.6 million. The total market value of APFC investments on December 31 was $74.4 billion.

The APFC understands that many of the portfolio companies in its private equity portfolio used Silicon Valley Bank for operating purposes. As of today, APFC understands that those companies’ deposits have been guaranteed by the federal government.

“The APFC is a fully diversified global investor,” stated Executive Director Deven Mitchell. “At any point in time, some sector of the economy can experience distress.”

Chair Ethan Schutt stated, “The Board of Trustees is committed to maintaining prudent diversification of its investments. While the U.S. and global economies continue to make progress toward emerging from the global pandemic, we should not be surprised by periodic reversals in various sectors.”

The APFC will continue to closely monitor this situation.

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APFC’s Board of Trustees Q2 Meeting Overview

In Uncategorized by Adam Kane

Juneau – The Board of Trustees held its quarterly meeting in Juneau and via webinar on February 15, 2023, to review the Alaska Permanent Fund’s second-quarter investment performance, discuss the upcoming annual asset allocation, consider in-state investments, and assess risk management metrics.

Chair Ethan Schutt provides that “the Alaska Permanent Fund’s ongoing success relies on the Board’s and staff’s abilities to provide a long-term risk-adjusted return to benefit generations of Alaskans.  This maximum return threshold is best achieved through market-driven decisions, benchmarked performance, and an effective asset allocation based on targeted returns.”

During the meeting, a thoughtful discussion was led by guest speakers, Alaska Senator Stedman and Alaska Representative Edgmon, on the importance of the Corporation’s independence and appropriate oversight. The supportive dialogue also focused on the importance of ongoing outreach and education about the intergenerational benefit of the Fund and its ability to generate annual state revenue. It was acknowledged that given the two account structure, both inflation-proofing to maintain the purchasing power of the Principal and the durability of the Earnings Reserve Account warrant ongoing attention.

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Upcoming Board of Trustees Meeting

In Uncategorized by Jennifer Thorsteinson

The Alaska Permanent Fund Corporation’s (APFC) Board of Trustees will hold a Quarterly Meeting on February 15, 2023, from 8:30 am to 4:15 pm. The public is invited to attend this meeting in person, via Webinar (information listed in the agenda below), or telephonically.

Please see the agenda for more details.

February 15, 2023 APFC Board of Trustees Quarterly Meeting Agenda_REVISED2

February 15, 2023 APFC Board of Trustees Quarterly Meeting Packet_REVISED2

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FY23 Mid-Fiscal Year Review

In Uncategorized by Adam Kane

Entrusted as stewards and fiduciaries of the Permanent Fund, APFC’s vision and diverse investment strategies complement the long-term investment horizon for the Fund.

“I fully understand and appreciate the importance of protecting this vital resource for the benefit of both the current and future generations of Alaskans,” says APFC Executive Director Deven Mitchell.

United by the shared values of integrity, stewardship, and passion, the Board and staff of the Alaska Permanent Fund Corporation are committed to safeguarding, prudently managing and investing the assets of the Permanent Fund in service to Alaska and partners worldwide.

Read APFC’s Perspectives FY23 Mid-Fiscal Year Review

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APFC and the business of taking risks

In APFC Perspectives by Adam Kane

“The fundamental premise of risk management is accepting that there are inherent uncertainties in the longer-term pursuit of making money,” says Sebastian Vadakumcherry, APFC’s Chief Risk and Compliance Officer. “Understanding and appreciating how much an investor could expect to lose can lead to better investment decisions.”

Most investment institutions have a target return or benchmark goal that they are trying to achieve. To meet or exceed those goals, institutional investors need to take risks with their capital. With the understanding that the same level of return can be earned with varying levels of risk, risk management helps to achieve targeted returns with the lowest level of risk.

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Informal Request for Proposals – Governance Consultants

In News by Adam Kane

The Alaska Permanent Fund Corporation posted an Informal Request for Proposals (IRFP) to the State of Alaska’s Online Public Notice (OPN) system seeking information from governance consultants to assist in the periodic review of existing APFC governance policies.

APFC governance policies call for a review every three years. While this review has traditionally been carried out internally, the Board of Trustees would like to engage an external, third-party consultant to assist in the upcoming three-year review to ensure that existing governance policies meet best practice standards.

The IRFP #FY23-006 can be found on the State of Alaska’s Online Public Notice (OPN) system. The deadline for receipt of proposals is 4:00 pm on Friday, January 20th.

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Infrastructure, Changing the Definition

In APFC Perspectives by Adam Kane

Changing the definition

Investments in infrastructure, the backbone of those things societies depend on every day, have proven their ability to generate consistent revenues over the long term. Since 2007, APFC has been investing in infrastructure assets in the United States and internationally.  The definition of infrastructure itself has continued to expand and evolve over the years. The asset class used to primarily consist of utilities, transportation assets, waste, and water systems. Today, the asset class includes telecommunications infrastructure such as cellular towers, fiber optic networks, and data centers; renewable electricity generation, energy storage, and social infrastructure such as specialty healthcare facilities. Investments in assets that were once considered risky, like telecommunications assets or renewable power generation, are now quite common.

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Alaska Permanent Fund Corporation Named Best Places to Work in Money Management for the 2nd Time

In Uncategorized by Adam Kane

Juneau – The Alaska Permanent Fund Corporation (APFC) was named Pensions & Investments 2022 Best Places to Work in Money Management, winning this prestigious title for the second year in a row.

Announced today by Pensions & Investments, the global news source of money management, the 11th annual survey and recognition program is dedicated to identifying and recognizing the best employers in the money management industry.

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APFC’s Board of Trustees Q1 Meeting Overview

In Uncategorized by Adam Kane

Juneau – The APFC Board of Trustees held its quarterly meeting in Juneau and via webinar on December 7-8, 2022, to review the Alaska Permanent Fund’s first-quarter FY23 investment performance. The Board held discussions on capital markets insights, staff recruitment and retention efforts, insights into the Infrastructure portfolio from internal and external managers, perspectives on risk, and a look ahead to the upcoming portfolio’s annual asset allocation.

Quarter-end financial results

Financial results for the first quarter of FY23, ending September 30th, 2022, showed the Total Permanent Fund portfolio with $73.3 billion in assets, a decrease of 3.8% for the quarter. Despite the downturn, the Total Fund outperformed the performance benchmark by .16% and the passive benchmark by 3.17%, though with persistent inflation, it underperformed the long-term objective of CPI + 5% benchmark. Over the 10- and 20-year periods, the Fund outperformed and was ahead of all three targets. The Fund also saw a year-to-date realized statutory net income of $518 million.

Given the Fund’s current two-account structure, the Principal can only grow through royalty deposits, special appropriations, and annual inflation proofing. During the first quarter of the fiscal year, $369 million of mineral deposits were made to the Principal, which included $200 million for FY18 & FY19 deposits. Inflation proofing has been appropriated for FY23, and the final amount will be calculated at the end of the year.

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