Alaska’s SWF Taps Willoughby As New CIO

The Alaska Permanent Fund, one of the few sovereign wealth funds in the United States, appointed Jay Willoughby to be its chief investment officer, effective Nov. 1. Willoughby joins the $40 billion fund from Ironbound Capital Management, a New Jersey-based hedge fund, where he was a co-managing partner. Ironbound is in the process of shutting down and returning money to its investors.

Prior to Ironbound, Willoughby worked as part of a high-net-worth client group at Merrill Lynch, serving as that group’s chief investment officer and head of research for equity funds. Willoughby will be based in Juneau and have base salary of $325,000. According to the Juneau Empire, there were 53 applicants for the job.

“Jay comes to us with experience managing funds of different sizes with different goals and risk parameters, as well as experience working directly with equities and real estate,” said Michael Burns, the fund’s chief executive, in a written statement. “Like many of our peers around the world, he is interested in the risk based asset allocation we have created and looks forward to having it as part of his tool kit for managing the fund’s investments.”

The Alaska Permanent Fund performed strongly during fiscal 2011, which ended on June 30, gaining 21 percent, its best performance since 1986. The fund’s $1.3 billion in private equity investments amount to just half the fund’s 6 percent private equity allocation.

Last May, the fund said it would make $1.75 billion in new commitments to alternatives, including $1 billion for private credit and infrastructure investments.

As chief investment officer, Willoughby replaces Jeffrey Scott, another former hedge fund manager, who resigned in August to become the CIO of Wurts & Associates, a Seattle-based provider of institutional money-management advice.

The Alaska Permanent Fund was created in 1976 as an initiative to manage the state’s oil and mineral wealth following the completion of the Trans-Alaska Pipeline. The fund aims to save and invest the state’s natural resource revenue, while spending some of the proceeds on infrastructure and annual payments to state residents. The fund’s Web site says the fund has made $17.5 billion in payments to Alaskans since 1982.

Both Willoughby and the fund’s spokeswoman were unavailable to comment.