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APFC Board Amends Investment Guidelines and Programs

MAR 1 - The Alaska Permanent Fund Corporation Board of Trustees amended the infrastructure guidelines in the APFC’s investment policy at its regular meeting on Wednesday and Thursday in Juneau. In addition, the Board moved toward international real estate investments and expanding the range styles within the stock portfolio.

“Our internal staff has put together a detailed review process for analyzing infrastructure co-investment opportunities that ensures each investment will see a thorough review,” said Board Chair Bill Moran. “In fact, they already applied this process to a recent investment and declined it. It gives the Board confidence in our investments when the staff is willing to say no to one that is not quite right for the Fund.”

Along with reviewing and approving the co-investment process, the Board amended the APFC’s investment policy to include listed infrastructure as an allowed infrastructure investment. The Fund’s present infrastructure investments are all directly made through pooled funds. In contrast, listed infrastructure is publicly traded shares of a company that owns and manages infrastructure investments, similar in nature to a REIT. These investments will enhance the infrastructure portfolio through increased liquidity.

The Board has made $1.7 billion in commitments to infrastructure to-date, and did not make any changes to the $400 million allocation to infrastructure for fiscal year 2013 that was approved at the May, 2012 meeting. The Fund’s infrastructure holdings were valued at $792 million as of December 31.

In conjunction with a review of the Fund’s asset allocation, the Board also took the following steps to modify the current structure and pave the way for future investments:

  • Approved the assembly of an up to $1 billion Barclay’s Aggregate-aligned portfolio within the Fund’s internal fixed income holdings.
  • Directed Callan, the Board’s general consultant, and any other external fiduciaries engaged by staff to review the international real estate capabilities of the APFC’s current real estate advisors.
  • Approved two manager searches, one for emerging market and one for non-U.S. stock managers, to fill style gaps within the portfolio. At the conclusion of the search, up to five managers may be hired in each area.

The Board’s next regular meeting is scheduled for May 22 and 23 in Anchorage.

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