Alaska Permanent’s direct investments take hit amid tech turmoil

The SWF's special opportunities basket focuses on direct investments in venture capital and buyout deals as well as co-investments and stakes in investment firms.

Alaska Permanent Fund, the world’s 28th biggest investor in private equity according to the GI 100, has reported that a portion of its private equity portfolio which tilts heavily to ward direct investments fell by 1.6 percent during the fourth quarter of last year.

Alaska’s special opportunities basket is focused on direct investments in venture capital and buyout deals, along with co-investments and stakes in investment firms.

According to Greg Allen, chief executive of consulting firm Callan, who reviewed the fund’s performance at the board’s quarterly meeting on Wednesday, the special opportunities bucket suffered largely due to its exposure to biotech companies.

“This is the worst year biotechs have had in over a decade,” Allen said.

Alaska has roughly $15 billion dedicated to private equity, with $5 billion of that allocated to its special opportunities bucket.

LPs are bracing for plunging private equity valuations as traditionally lagging private markets catch up with the public market turmoil. The weakness in Alaska’s special opportunities holdings could portend bad news for firms with exposure to more exotic investment structures.

Some of the larger direct biotech investments Alaska made include a $148.8 million commitment to Denali Therapeutics in 2015 and a 2014 commitment of $128.9 million to Juno Therapeutics, its most recent report said.

In 2020, Alaska made $73.5 million in commitments to five biotech companies through the Altitude Life Sciences Ventures Side Fund IV. The companies in this investment include Generate Biomedicines, Inzen Therapeutics, Laronde, Ring Therapeutics and Tessera Therapeutics.

Alaska’s head of alternative investments, Steve Moseley, is stepping down from his post in June, he confirmed to Private Equity International on Wednesday. The Wall Street Journal first reported on Moseley’s planned departure.

The value of traditional private equity assets rose by 4.6 percent for the quarter. This trailed behind the Cambridge Private Equity Benchmark, which had a return of 5.14 percent for the final three months of 2021.

– This report was originally published on affiliate title Buyouts.