Alaska Permanent Fund ups co-investment plan

The sovereign wealth fund is keeping its private equity commitment plan for fiscal year 2018 mostly unchanged, but it will increase its capacity to co-invest.

Alaska Permanent Fund Corporation intends to increase the share of co-investments in its private equity commitment plan for 2018 fiscal year compared with 2017.

APFC, which had 6.8 percent of its $57 billion assets in private equity as of 31 March, plans to have about 35 percent of its $900 million private equity target commitment amount for the 2018 fiscal year in co-investments, according to materials for its 16 May board meeting. APFC’s fiscal year starts on 1 July.

In the 2016 and 2017 fiscal years, APFC could allocate up to 25 percent of the overall private equity commitment amount to co-investments.

While the co-investment portion of its annual private equity commitment target is increasing, the Juneau-based sovereign wealth fund is maintaining the overall $900 million commitment target it had during the 2016 and 2017 fiscal years.

For 2018, APFC has also set a target commitment range of between $700 million and $1.1 billion to accommodate various market conditions.

According to the materials, APFC has already committed $912 million to 17 private equity fund managers and $80 million in co-investments to three companies in the 2017 fiscal year, which ends 30 June.

APFC also has a special opportunities portfolio, which it describes as opportunistic, theme-driven investments, that has a $450 million commitment target for the 2018 fiscal year, the materials showed.

In the current fiscal year, the sovereign wealth fund has committed $380 million to date, including $170 million in structured fund commitments – which APFC’s investment policy describes as separate accounts, funds of one or other similar structures – and $210 million in direct investments. As of 31 March, APFC had 4.2 percent of its overall fund in special opportunities.

For the combined programmes of private equity and special opportunities, APFC has an 11 percent target allocation, which will increase to 14 percent in the next three years, the materials showed.

Some of the private equity funds APFC has committed to recently include tech-focused Vista Foundation Fund III, preferred equity fund Whitehorse Liquidity Partners I and manufacturing sector-focused Industrial Growth Partners V, according to PEI data.