The Alaska Permanent Fund Corporation (APFC) Board of Trustees will hold an Audit Committee Meeting and Budget Work Session on September 2, 2021 at the Atwood Building – Rooms 102/104, 550 W 7th Ave, in Anchorage. The public is invited to attend this meeting in person, or via webinar (links are in the agendas) and there will be an opportunity for public comment and participation at the beginning of both meetings.
Audit Committee Agenda
APFC Board of Trustees Audit Committee Packet
Budget Work Session Agenda
APFC Board of Trustees Budget Work Session Packet
Permanent Fund closes record year at historic high value
On June 30th, APFC finished Fiscal Year 2021 by recording an all-time high value for the Alaska Permanent Fund of $81.1 billion. Preliminary results indicate the Fund returned 29.73 %, a record strong performance as well.
The unaudited results for the Fiscal Year show the Principal of the Fund, consisting of two parts, totaled $60.1 billion. The permanent savings contributions were valued at $46.9 billion, and there were $13.2 billion in unrealized gains.
The Earnings Reserve Account totaled $21.0 billion, consisting of four parts. The uncommitted realized earnings were valued at $9.3 billion, and there were $4.6 billion in unrealized gains. The ERA had $3.1 billion in committed realized earnings available for the FY22 POMV draw and $4.0 billion committed to the Principal as a Special Legislative FY22 Appropriation*.
An independent third party conducts an audit of the Alaska Permanent Fund’s financial statements on an annual basis. In accordance with our statutory obligation under AS 37.13.170, the audited financial statements are published in our annual report and made available to the public at the time of the Board of Trustees Annual Meeting. This year’s annual meeting will be held in Kodiak on September 28-29, 2021.
*Please note that the July 31, 2021, the start of the fiscal year 2022 financial statements, will reflect the deposit of the $4 billion to Principal.
Looking Ahead at Fiscal Year 2022
July 1, 2021, marked the start of APFC’s 2022 Fiscal Year. As we set forth into the new Fiscal Year, following the timely resolution of the state’s operating budget, we recognize the commitment and continued professionalism of APFC staff who have been working diligently to support our fellow Alaskans. APFC remains fully operational and we continue to actively manage the assets of the Permanent Fund, identifying and acting on compelling investments to deliver on our mandate of generating outstanding returns for the benefit of all current and future generations of Alaskans.
Along with the start of the new Fiscal Year is the adjustment of asset allocations to fit within the targeted ranges established by the Board of Trustees every 5 years. This shift of assets across the Fund’s 8 asset classes includes 1 percent decreases in Public Equities and Fixed income investments, while increasing investments in Real Estate and Private Equity by 1 percent. The other asset classes are targeted within the same allocations through FY25. The total portfolio mix is intended to represent the expectations of the Board’s long-term vision while conforming to their approved risk appetite for the Fund.
As the Principal of the Fund is protected constitutionally, the Earnings Reserve Account is available for legislative appropriation. State Legislature has an established Percent of Market Value formula for sustainable withdraws from the Fund set at 5 percent annually.
A $3.1 Billion POMV draw will be transferred to the State of Alaska during FY22, which represents the primary revenue source for the state. Revenue generated by Permanent Fund investments now constitute more than 70% of the state’s general fund – meaning that 70 cents of every 1 dollar spent on education, public safety, transportation and other essential services and programs comes from the Fund’s earnings.
APFC on Critical Services List
Work to resolve the status of the State of Alaska’s Fiscal Year 2022 budget continues; the administration has released a list of critical services. As per that list, should there be a government shutdown on July 1, 2021, the Alaska Permanent Fund Corporation will remain fully operational.
Managing over $80 billion of financial assets requires a tremendous amount of diligence, resources, and commitment, a responsibility that we all hold to the highest standard of fiduciary duty.
Our ongoing stewardship of the Alaska Permanent Fund supports all Alaskans – our friends, neighbors, and fellow public service professionals.
We encourage all of our Alaskan leaders to work together to seek a timely resolution.
APFC Prepares For Government Shutdown
Chief Executive Officer Angela Rodell announced today that the Alaska Permanent Fund Corporation (APFC) is taking steps to ensure that the Alaska Permanent Fund and money managed on behalf of the Alaska Mental Health Trust Authority are prudently overseen in the event of a government shutdown.
The Chief Executive Officer and her staff have been diligently working to ensure that a business continuity plan is in place to protect the assets should there be a government shutdown. This includes ensuring that protocols with the Fund’s custodial bank are in place and that the ability to transfer money and make payments under existing agreements are secured.
It is important to note that this plan does not provide for the active, forward-looking investment of the Fund that the Corporation engages in daily. Based on the advice received from the Department of Law, it is anticipated that during a shutdown, no new investments will be pursued. Therefore, there can be no assurance that a government shutdown will not have a material impact on the earnings and performance of the Fund.
CEO Angela Rodell asserts, “This is the second time in 5 years we have had to take these steps. The State depends on us more than ever, so this is a high-stakes game being played with serious impacts on the lives of every Alaskan, which could be felt for a long time to come. I encourage everyone to get back to the table so that we can continue to do our work uninterrupted and generate revenue for the State of Alaska.”
The APFC staff manages and invests the assets of the Alaska Permanent Fund and assets on behalf of the Alaska Mental Health Trust Authority; they are among the many state employees who got lay-off notices. The unaudited market value of the Fund is currently over $ 80 billion, an all-time high.
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Trustee Craig Richards Reappointed to 4-year term
Governor Mike Dunleavy today announced the reappointment of Craig Richards to the Alaska Permanent Fund Corporation Board of Trustees for the term of July 1, 2021 to July 1, 2025. Trustee Richards served on the Board of Trustees from 2015 to 2016 and was reappointed in 2017.
Craig Richards majored in finance at the University of Virginia, received his Masters in Business Administration from Duke University and Juris Doctorate from Washington & Lee University. After serving as law clerk for Judge Beistline, Richards worked in private practice with a focus on oil and gas. He served as Attorney General for the State of Alaska from 2014 to 2016 and has since reentered private practice in Anchorage.
$80 Billion Milestone Daily Fund Value
Today we take a moment to celebrate and reflect on our path through the global uncertainty, volatility and resilience we’ve seen over the past year. While Alaskans have stood strong together, as a state-wide community, we have adjusted and adapted our lives and our strategies to succeed in a changed world, and we are proud of our achievements.
Our reason for celebrating is the growth in the daily value of the Alaska Permanent Fund, which exceeded the $80 billion milestone for the first time based on the close of the market yesterday, May 27th.
While heralding this daily number and momentous milestone of the state’s most valuable renewable financial asset, it is important to recognize how the daily numbers differ from those of on our monthly statements.
The Daily Market Value does not have the benefit of the month end reconciliation calculations. It does reflect investment related liabilities, such as pending purchases – but does not reflect obligations such as income distributable to the State of Alaska (remaining FY21 POMV of $492 million), accrued operating expenses, and accrued manager fees. When we report and post a monthly Fund balance, based on the reconciled Financial Statements – the month end liabilities have been fully accounted for and deducted from that balance.
With one month remaining in Fiscal Year 21, which ends June 30, we understand that there is still unresolved uncertainty in global markets and things can change. APFC’s skilled team will continue to use their expertise and knowledge to successfully navigate through potential volatility, in order to follow through on our mandate to deliver outstanding returns for the benefit of all current and future generations of Alaskans.
Learn more about Fund Performance
Trustees Assess Market Outlook and Opportunities for Real Estate
Juneau – The Board of Trustees held its quarterly meeting at the Elizabeth Peratrovich Hall in Juneau and simultaneously via webinar on May 19-20, 2021, to review the performance of the Alaska Permanent Fund through the third quarter of fiscal year 21 (FY21), review risk metrics, assess the capital markets outlook, incorporate updates in the investment policy, get an update on pacing plans for Real Estate and Alternative Investments, and focus on the Real Estate portfolio.
Chair Bill Moran remarked that “the growth of the Alaska Permanent Fund is unprecedented. We must put this unparalleled growth into context and recognize it is not sustainable. Recessions are likely in our future and will have a negative impact on the Fund, which will impact the State. Knowing that the State now gets more than 70% of its revenue from annual withdrawals from this Fund, we must remain diligent in managing and understanding our portfolio risk.”
The total value and the stellar performance of the Alaska Permanent Fund continue to dominate the fiscal year-to-date narrative. Through the third quarter of FY21, a period beginning July 1, 2021 and ending March 31, 2021, the Alaska Permanent Fund continued to exceed established performance benchmarks and projections, increasing to a total value of $76.3 billion, which represents an increase of more than $11 billion since the beginning of the fiscal year. The total Fund return through the third quarter of FY21 was 22.69% and 5.95% for the individual quarter ended March 31; this was fueled mainly by public and private equity markets. Callan reports that this performance placed the Total Fund above the median relative to the performance of other public funds and large endowments/foundations.
The Real Estate portfolio plays a unique and essential role in APFC’s investment portfolio in terms of diversification, regular cash flow income, and long-term growth. As an inflation-resistant cash yield, Real Estate tends to embody characteristics of both debt and equity, where lease payments resemble fixed income obligations. At the same time, the property’s residual value contains equity-like attributes. While the asset class has struggled in recent years, it remains central to the investment portfolio for the Fund.
“The successful growth of the Fund’s Real Estate portfolio up to the ultimate target allocation of 12% over the next four years is a key focus for the Investment Team. High quality private Real Estate investments held directly or through open-ended funds remains one of the most attractive inflation-protection cash yielding investments in the market today,” commented APFC CIO, Marcus Frampton.
APFC BOT Quarterly Board Meeting
The Alaska Permanent Fund Corporation (APFC) Board of Trustees will hold their Quarterly Meeting on May 19-20, 2021. The public is invited to attend this meeting via Webinar (information listed on the agenda linked below) or in person at the address below*. There will be an opportunity for public comment and participation at 8:30 a.m. when the meeting commences. If the public wishes to sign up for public comment, please indicate so when registering via WebEx. If you have any issues registering for public comment, please reach out to Jennifer Thorsteinson (jthorsteinson@apfc.org) at least one business day before the meeting.
*Please note that while APFC’s May Quarterly Board of Trustees meeting will be open to the public, the Andrew Hope Building (320 W Willoughby Avenue) where the meeting will be held has limited entry at this time.
Please park in a parking lot on either side of the building (but not in a space reserved for any individuals). Enter through the double doors towards the middle of the building and let security know you’re there for the APFC Board Meeting. Please plan to arrive early to sign in and have a temperature check required to enter the building. Upon entering the Elizabeth Peratrovich Hall there will be an APFC sign-in sheet for all members of the public.
May 19-20, 2021 APFC Board of Trustees Quarterly Meeting Agenda
May19-20, 2021 APFC Board of Trustees Quarterly Meeting Packet
APFC Board of Trustees Audit Committee Meeting
The Alaska Permanent Fund Corporation (APFC) Board of Trustees will hold an Audit Committee Meeting on May 18, 2021. The public is invited to attend this meeting via Webinar (information listed on the agenda linked below) or in person at the address on the agenda. There will be an opportunity for public comment at 2:30 p.m. when the meeting commences. If the public wishes to sign up for public comment, please indicate so when registering via WebEx. If you have any issues registering for public comment, please reach out to Jennifer Thorsteinson (jthorsteinson@apfc.org) at least one business day before the meeting.
May 18, 2021 APFC BOT Audit Committee Agenda
APFC Board of Trustees Audit Committee Meeting Packet