Alaska Permanent Fund Pledges $500M For Fiscal 2010

The Alaska Permanent Fund Corporation approved a new private equity investment policy resolution in late May that includes a $500 million commitment for its fiscal year 2010, which begins July 1, 2009.

The amount will be divided between Boston-based HarbourVest Partners LLC, a Boston fund-of-funds manager hired in December to oversee a separate global private equity portfolio discretionary account; and Pathway Capital Management, an Irvine, Calif.-based firm that currently manages two private equity portfolios for the limited partner. The exact split between the two managers hasn’t been worked out yet, said spokesperson Laura Achee.

The LP also created a new asset allocation scheme consisting of 2 percent to cash; 6 percent to government or government-related bonds; 53 percent to company exposure, which includes stocks, corporate bonds and private equity; 18 percent to real assets (real estate, infrastructure and Treasury Inflation-Protected Securities, or TIPS); and 21 percent for an opportunity pool, including absolute return and distressed debt.

“We’re taking a fresh approach to how we view our asset allocation,” said Michael Burns, CEO, in a prepared statement. “We’re recognizing that some investments within an asset class may have more in common with other asset types with regard to expected risk and return. And since our goal at the highest level is to balance the risk and return of the total portfolio, it makes sense to segregate assets by their characteristics, rather than simply by type.”

The LP’s target allocation to private equity is still 6 percent, with a range of 1 percent to 11 percent. The actual private equity allocation stood at 2.4 percent, as of April 30. Private equity commitments made in 2008 include Blackstone Capital Partners VI ($40 million); Candover 2008 ($36 million); CVC European Equity Partners V ($32 million); First Reserve XII ($40 million); Madison Dearborn Capital Partners VI ($40 million); Onex Partners III ($45 million); Sentinel Fund IV ($11 million); and TPG Partners VI ($35 million).

The Alaska Permanent Fund has $28 billion in assets under management.