APFC Board approves asset allocation, re-elects Bill Moran as Chair
OCT 2 - The Alaska Permanent Fund Corporation Board of Trustees re-elected Bill Moran as Chair and Steve Rieger as Vice-Chair of the Board during its annual meeting on Thursday and Friday. The Board also approved changes to the Fund's strategic asset allocation and amended the infrastructure program.
"We try to build a portfolio that will help stabilize returns across a range of economic conditions, rather than responding to what is happening in the markets," said Board Chair Bill Moran. "These are relatively small changes, but important for the long-term success of the Permanent Fund."
Under the new allocation adopted by the Board, company exposure was increased from 53 to 55 percent of the allocation and infrastructure was increased from three to four percent. The special opportunities allocation was decreased by three percent to allow for the corresponding increases. The increase in company exposure represents the transfer of existing mezzanine debt and credit opportunity mandates from the special opportunities bucket, and will not require new mandates or additional funding for existing mandates at this time.
The Board also approved changes to APFC's infrastructure investment policy to allow investments in infrastructure funds based on the recommendation of an independent fiduciary, and to add authority to co-invest subject to a Board approved process. This investment process has been permissible under APFC's regulations, which were last amended in 2005, but were not specifically allowed under the investment policy. The one percent increase in the target allocation will allow room for this asset class to grow over the next several years.
In addition the Board heard presentations on other topics, and took action as needed.
- The Board approved the proposed Fiscal Year 2013 budget, which will be put forward for approval by Governor Parnell and the Alaska State Legislature in the upcoming legislative session.
- KPMG provided a report of their Fiscal Year 2011 audit results, which were accepted by the Board.
- Michael O'Leary of Callan Associates reviewed the Permanent Fund's performance for Fiscal Year 2011, in which the Fund returned 20.6 percent.
- Staff provided an overview of available inflation hedging strategies, and preliminary review of managers that offer these strategies.
- Staff provided the Trustees with overviews of the structure and performance of the Fund's bond and real estate portfolios.
The next regular Board of Trustees meeting is scheduled for December 6 and 7 in Anchorage.
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