Alaska eyes $271m in secondaries sale

The sovereign wealth fund plans to sell 20 fund stakes in private equity, which has a $3.6bn market value in its portfolio.

Alaska Permanent Fund is looking to sell 20 private equity fund stakes in secondary transactions worth $271 million, according to its May board meeting materials.

It did not name which stakes would be sold.

The fund committed $869 million to 27 private equity funds in the fiscal year 2016, up from $792 million committed to 19 funds in 2015. Those funds include new general partner relationships with Kelso & Company, L Catterton, Leonard Green & Partners, Ridgemont Equity Partners and American Industrial Partners.

As of 30 April, the sovereign wealth fund had a $3.6 billion private equity portfolio, which returned 15 percent in the past year to that date and 16 percent in the last five years, according to its Monthly Performance Report.

Its secondaries exposure includes approximately $400 million invested in secondaries, opportunistic private investments and hedge funds through fund of funds manager Crestline.

In the first quarter of 2016, the fund committed $94 million to one secondary fund. During the quarter, it spoke with Greenhill Cogent, Lazard, UBS and Ardian regarding secondaries.

Its commitment to Kelso was sized at $75 million in commitment to Kelso Investment Associates IX, according to PEI Research & Analytics.

It also invested $71 million in three companies through co-investments, which performed the best out of all strategies in its portfolio, marking 51.6 percent in net internal rate of return for a three-year period.

For the 2017 fiscal year, the board approved $900 million in allocations to traditional private equity, including maximum $225 million to co-investments, and $350 million to structured private equity, which are commitments with unconventional benefits or structure. An extra $200 million may be allocated to each strategy as an option, it said.

Board chairman Bill Moran said in a statement the fund’s private market investments will become more important for growth and income in a low-interest rate environment.

A spokeswoman for the fund could not be reached for comment.