Empirical evidence shows that Public Equities investment outperformance is challenging to generate and sustain long-term. It requires a certain degree of skill, market perspective, and time. As with all of the Alaska Permanent Fund Corporation’s asset classes, the key objective of the Public Equities portfolio is to outperform its benchmark over time and across market cycles. Investing for the long run enables the Corporation to design and implement well-thought-out strategies and then let them play out over several years.
Over the past ten years, Fawad Razzaque, APFC’s Director of Public Equities, has been progressively incorporating more active management externally and internally throughout the portfolio to optimize its long-term returns. A key part of the management strategy is gauging market conditions and assessing how much risk is appropriate and where to allocate that risk budget. “If you’re too conservative, you could be leaving some returns on the table,” Fawad recognized, “if you’re too aggressive you are taking too much risk, and it may come back to bite you. There’s a fine line in between.”