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Alaska Permanent Fund

Alaska Permanent Fund

The Alaska Permanent Fund is a constitutionally established permanent fund managed by a state-owned corporation.

Overview

Alaska Permanent Fund is a sovereign wealth fund of the Government of Alaska. The firm invests mineral revenue of the state. It invests in public and private equity, distressed funds, real estate, and fixed income markets. The firm invests in stocks, bonds – U.S. and non-U.S., infrastructure, timber, and absolute return strategies including hedge funds. Within real estate, it invests in industrial, multi-family (residential), office, and retail properties in the U.S. and real estate investment trust securities.



History



The Alaska Permanent Fund is a constitutionally established permanent fund managed by a state-owned corporation, the Alaska Permanent Fund Corporation (APFC). It was established in Alaska in 1976 by Article 9, Section 15 of the Alaska State Constitution under Governor Jay Hammond. From February 1976 until April 1980, the Department of Revenue Treasury Division managed the state's Permanent Fund assets, until, in 1980, the Alaska State Legislature created the APFC. As of the end of 2016, the fund is worth nearly $65 billion that has been funded by oil revenues.



The Alaska Permanent Fund is a fund which originates from surplus revenues gained from the development of Alaska's oil and gas reserves. Managed by The Alaska Permanent Fund Corporation, a state-owned corporation, the fund's value was $64 billion as of March 27, 2018.



The Alaska Permanent Fund Corporation (“APFC”) is the largest sovereign wealth fund in the United States, with over $65 billion of assets under management. Their goal is to create positive economic impact and long-term value for Alaskan constituents, the companies they invest in, and the partners with whom they work. The Permanent Fund Dividend [PFD] is a dividend paid to Alaska residents that have lived within the state for a full calendar year (January 1 – December 31), and intend to remain an Alaska resident indefinitely.



The Alaska Permanent Fund Corporation (APFC) was created by the Alaska Legislature in 1980 as a quasi-independent state entity tasked with the important mission of prudently investing and managing the assets of the Alaska Permanent Fund. As one of the first sovereign wealth funds and the largest state-level fund of its kind in the United States, the Alaska Permanent Fund (Fund) has gained worldwide recognition as a model for converting a non-renewable natural resource into a renewable financial resource.

The Alaska Permanent Fund Corporation manages the assets of both the Permanent Fund and other state investments, but spending Fund income is up to the Legislature. The Fund grew from an initial investment of $734,000 in 1977 to approximately $53.7 billion on July 9, 2015. Some growth was due to good management, some to inflationary re-investment, and some via legislative decisions to deposit extra income during boom years. Each year, the fund's realized earnings are split between inflation-proofing, operating expenses, and the annual Permanent Fund Dividend.

The fund is a member of the International Forum of Sovereign Wealth Funds and has therefore signed up to the Santiago Principles on best practice in managing sovereign wealth funds.

Investments

Alaska Permanent Fund has made 9 investments. A sizeable investment was made on Sep 18, 2018, when they invested $250M in Indigo. APF has had 2 exits. The fund's most notable exits include Juno Therapeutics and Denali Therapeutics.

Investment strategy

The Alaska Permanent Fund Corporation has an asset allocation that is approved by the Board of Trustees, reviewed annually, and designed to deliver risk-adjusted returns over the long term for the benefit of Alaskans. When considering the asset allocation, the Board does not try to time markets or focus on short-term market conditions. Instead, the Board engineers a portfolio that provides a diversified and compelling long-term return under a variety of potential market conditions.



The fund is invested globally across public and private assets which include growth and income objective strategies. The goal is to have well-diversified investments that distribute risk and generate the highest possible return within the mandate given by the Board of Trustees. The asset allocation structure defines seven asset classes:.

  1. Public Equities,
  2. Fixed-Income Plus
  3. Private Equity & Special Opportunities
  4. Real Estate
  5. Infrastructure
  6. Absolute Return Strategies
  7. Allocation Strategies.



Asset allocation Structure

Growth Income

Tradeable/Liquid Tradeable/Liquid

Public Equities (Stocks) Fixed Income Plus (Bonds)

Cash

Illiquid Illiquid

Private Equity Real Estate

Absolute Return Infrastructure

Allocation Strategies

Fund Value

The Total Fund Value is comprised of the Principal (non-spendable) and the Earnings Reserve Account (spendable). The Fund market value, which is based upon the previous day’s market close, fluctuates daily based on the current market conditions. Monthly financial statements reflect the current value of the Fund.







Timeline

September 17, 2018

Indigo

Series E - Indigo

$250M

November 28, 2017

Codiak Biosciences

Series C - Codiak Biosciences

$76.5M

October 24, 2017

Generate Capital

Private Equity Round - Generate Capital

$200M

September 25, 2017

Indigo

Series D - Indigo

$156M

July 20, 2016

Indigo

Series C - Indigo

$100M

January 25, 2016

Codiak Biosciences

Series B - Codiak Biosciences

$61M

May 13, 2015

Denali Therapeutics

Series A - Denali Therapeutics

$217M

August 4, 2014

Juno Therapeutics

Series B - Juno Therapeutics

$134M

December 2, 2013

Juno Therapeutics

Series A - Juno Therapeutics

$120M

People

Name
Role
LinkedIn

FAWAD RAZZAQUE

Director of Public Equity Investments



JAMES PARISE

Director of Fixed Income Investments



MARCUS FRAMPTON

Chief Investment Officer



ROSEMARIE DURAN

Director of Real Estate Investments



STEPHEN MOSELEY

Head of Alternative Investments



VALERIA MARTINEZ

Director of Asset Allocation



Further reading

Title
Author
Link
Type
Date

Africa's natural resource revenue for all: The Alaska Permanent Fund Dividend model

Landry Signé

Web



Alaska Permanent Fund FYTD19 Second Quarter Financials - Alaska Permanent Fund Corporation



Web



Alaska Permanent Fund looks to pay investment managers incentives

Andrew Kitchenman, KTOO and Alaska Public Media

Web



Alaska Permanent Fund Returns -3.19% for the first half of FY19



Web



Alaska Permanent Fund seeks incentive pay for managers

Associated Press

Web



APFC Ad Hoc Committee - Compensation Telephonic Meeting - Alaska Permanent Fund Corporation



Web



APFC Quarterly Board of Trustees Meeting - Alaska Permanent Fund Corporation



Web



RFI issued in Connection with Alaska In-State Private Markets Manager Search - Alaska Permanent Fund Corporation



Web



The APFC Board of Trustees Review Fund Performance and Risk Components - Alaska Permanent Fund Corporation



Web



The future of Alaska's $65 billion fund that pays every citizen around $2,000 a year is a major issue in the governor's race

Richard Feloni

Web



The Labor Market Impacts of Universal and Permanent Cash Transfers: Evidence from the Alaska Permanent Fund by Damon Jones, Ioana Elena Marinescu :: SSRN



Web



What's an Alaska Permanent Fund Dividend, and How Can I Get It? -- The Motley Fool

Dan Caplinger

Web



Documentaries, videos and podcasts

Title
Date
Link

Alaska Permanent Fund

28 August 2018

Alaska Permanent Fund

Aug 28, 2018

Alaska Permanent Fund 101 Part 2

Jan 12, 2017

Alaska Permanent Fund Part 1

Dec 18, 2016

Alaska residents receive smaller oil fund payments

5 October 2017

Angela Rodell, CEO, Alaska Permanent Fund Corp.



BBN investigates Alaska Permanent Fund Corporation transparency

Jul 2, 2016

BBN investigates Alaska Permanent Fund transparency in Juneau, Alaska

Jul 2, 2016

Head of Alaska Permanent Fund Corp. talks about banner year

Jul 31, 2018

How Much Is The Alaska Permanent Fund Dividend For 2014?



How Much Is The Alaska Permanent Fund Dividend For 2016?



How Much Money Is In The Alaska Permanent Fund?



Karl Widerquist on the Alaska Permanent Fund



Mark Zuckerberg: The U.S. Should Learn From This State's Basic Income Program



Pat Galvin - Structure of the Alaska Permanent Fund

1 December 2009

Rethinking the Alaska Permanent Fund

May 12, 2018

The world is watching the Alaska Permanent Fund and PFD



What does it mean to use Permanent Fund earnings for state government?

18 May 2018

What Is The Alaska Permanent Fund?

Dec 14, 2017

Companies

Company
CEO
Location
Products/Services

Codiak Biosciences







Denali Therapeutics







Generate Capital







Indigo













References