Alaska fund commits $250m to MSIP II

The state-owned Alaska Permanent Fund Corporation (APFC) has allocated $250 million to Morgan Stanley Infrastructure Partners II (MSIP II), the second infrastructure fund currently being raised by the infrastructure and management platform of the Wall Street investment bank, Infrastructure Investor was able to confirm.

MSIP II, which has a target of $4 billion, held a first close on $1.5 billion Infrastructure Investor reported in July.

“Staff made that commitment [to MSIP II] under authority granted at prior board meetings to make commitments within set amounts,” APFC communications director Laura Achee said in an e-mailed response.

APFC’s board of trustees had approved several private asset investments in May, including $400 million to infrastructure, staying in line with allocations made to the asset class in previous years.

Last month, the APFC board reviewed the fund’s performance, which achieved a total return of 15.5 percent. “The Fund’s investments earned $6.8 billion, the highest amount in its 37-year history, and ended Fiscal Year 2014 with a value of $51.2 billion,” APFC said in a statement.

According to APFC, all of the Permanent Fund’s investments achieved positive returns ranging from five percent for fixed income to close to 30 percent in the fund’s stock portfolios. Infrastructure had a return of 12.9 percent.

Alaska began allocating to infrastructure funds in 2007, committing $500 million to Citi Infrastructure Investors, $500 million with Goldman Sachs Infrastructure Partners II and $350 million to Global Infrastructure Partners.

APFC manages the investments of the Alaska Permanent Fund, which was established in 1976 by a constitutional amendment to protect revenue generated by the state’s oil industry.

“At least 25 percent of all mineral lease rentals, royalties, royalty sales proceeds, federal mineral revenue-sharing payments and bonuses received by the state be placed in a permanent fund, the principal of which may only be used for income-producing investments,” according to the APFC website.

The Corporation was established four years later to manage the fund’s investments. Today, it also manages the assets of other funds designated by law, such as the Alaska Mental Health Trust Fund.