The Alaska Permanent Fund saw its value drop to $50.7 billion, down 1.2 percent, in the first quarter of fiscal year 2015 primarily due to losses in its non-US stock portfolio, according to a statement. Still, the fund finished the period ending September 30, 2014, ahead of the composite benchmark return of -1.6 percent, the Alaska Permanent Fund Corporation, which manages the permanent fund, said.
The fund’s strong performers were infrastructure and private equity, which provided positive returns of 3.8 percent and 5.4 percent, respectively, while the fund’s real estate and absolute return portfolios were effectively flat at 0.2 and 0.1 percent.
The non-US stock portfolio was the worst performing, returning -5.4 percent for the period.
“After two years of rising markets, a correction isn’t unexpected,” APFC chief executive Michael Burns said. “It appears that the European and Asian markets are facing more challenging circumstances and may stay down in the coming months, but here in the US the economic indicators appear sound,” he added.
The fund’s US-stock portfolio declined slightly, posting -0.9 percent, while the global portfolio returned -2.8 percent.
“The US markets have been more positive since the end of the first quarter, and with the majority of the fund’s investments in all of the asset classes based in the US, I’m feeling optimistic about the fund’s returns in the coming months,” Burns said.
The fund’s other portfolios – with the exception of the non-US bond portfolio, which was up 1.8 percent – achieved negative returns.
The Alaska Permanent Fund was established by a constitutional amendment to protect revenue generated by the state’s oil industry in 1976.
APFC 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.
The fund began allocating to infrastructure in 2007. Its most recent commitment to the asset class – a $250 million pledge to Morgan Stanley’s second infrastructure fund – was announced in October.