History – Alaska Permanent Fund Corporation

2012-2013 | Continuing the evolution of the Fund’s investments, the Board works to take advantage of APFC’s growing capabilities. Programs are created to bring international bond and infrastructure co-investments in house.

2014 | Fund assets reach $50 billion.

2015 | The Board amends two sections of APFC’s Investment Policy. One amendment allows staff to seek out any investment that has similar risk and return characteristics as infrastructure, rather than be limited to a rigid focus on traditional infrastructure sectors. The second amendment groups the Fund’s absolute return and real return investments under a single program. Specific amendments to the policy authorize the Fund to be placed in a smaller number of more concentrated investments to help lower investment costs and prevent overdiversification.

2016 | The Fund celebrates its 40th anniversary. FY16 is another volatile year, with continued global market corrections and declines in oil prices. However, APFC and the Fund are able to weather the storms with a diversified asset allocation, allowing significant losses in stocks to be offset set by gains in other asset classes. Oil prices eventually enter a period of relative stability, and the bond market outperforms expectations. The Fund ends FY16 with a value of just under $53 billion.

2017 | The Fund reaches a value of over $60 billion, growth that is attributed to APFC staff generating higher returns through active asset allocation and portfolio management. APFC is named a finalist for “Sovereign Wealth Fund of the Year” in Institutional Investor’s 15th Annual Hedge Fund Industry Awards. This serves as recognition of APFC staff’s stewardship of the Fund and commitment to being world-class investors on a global stage. APFC’s Trustees, Executive Leadership, and Staff implement a 5-year strategic plan, that is forward thinking, adaptable, consistent with APFC’s values, and reflective of stakeholders.

2018-2019 | For the first time in state history, the Legislature adopts a mechanism whereby Fund earnings are used not just to pay dividends, but to also contribute to state government under a percent of market value (POMV) methodology. Under this rules-based framework, the state operating budget for FY19 includes a $2.7 billion POMV draw from the Fund for the payment of dividends and to support government services. The POMV draw is based on a percentage of the average market value of the Fund for the first five of the preceding six fiscal years. The draw is subject to appropriation and is set in statute at 5.25% for Fiscal Years 2019-2021 and 5.0% from Fiscal Year 2022 onward.

In recognition of this transition period, when state revenues from oil development were unlikely to fully fund state revenue needs in the future, as a pivotal time for the Fund and Alaska, the Board of Trustees pass Resolution No. 18-04. This resolution affirms the importance of formulaic management of transfers into and out of the Fund to ensure its sustainability and long-term growth. In addition to the POMV structure, other elements are essential in achieving a balance between current demands on the Fund and the protection of intergenerational value: Adherence, Sustainability, Inflation Proofing, and Real Growth.

The Alaska Permanent Fund continues to grow in global stature and emerges as an integral part of our state’s fiscal future. In FY18, the Fund’s investments gain 10.74% and the Fund ends the year with assets under management totaling $64,894,345,000. The quality and diversity of the portfolio’s investment returns across all asset classes, and the Fund benefits from having a board-authorized investment structure that allowed APFC to identify and respond to targeted opportunities and risks within a shifting global financial landscape.

In FY19, APFC accomplishes significant growth with the support of Alaskans, welcoming 17 new staff and building up internal investment and management capabilities. The investment in staff, systems, and the remodeling of office space to accommodate today’s workflow requirements ensures Alaska has a platform to deliver for the next 40 years the results Alaskans have come to expect.