Alaska Permanent Fund feels warmth from private equity

Private equity drove returns at the Alaska Permanent Fund, which generated an overall return of 4.9 percent in fiscal 2015 ended June 30, according to a statement from the sovereign fund outlining preliminary figures.

Private equity gained 16.5 percent during the fiscal year after fees and expenses, the Permanent Fund said in the statement. Infrastructure investments returned 4.7 percent during the time period. The fund closed the fiscal year with a value of $52.8 billion.

During the fiscal period, the sovereign fund committed at least $800 million to 19 funds including Spectrum Equity VII, which closed on $1 billion last year; JMI Equity VIII, which closed on $1 billion last year; Glendon Opportunities Fund, which was expected to close on around $1 billion last year; Hellman & Friedman VIII, which closed on $10.9 billion last year; Kelso Investment Associates IX, which is targeting $2.5 billion; and New Enterprise Associates XV, which closed on around $2.8 billion earlier this year.The Permanent Fund also committed $110 million to four co-investments.

For fiscal 2016, the fund is targeting $900 million for private equity, which includes $225 million for co-investments. There is some flexibility and the total amount is capped at $1.1 billion, according to a prior statement from the sovereign fund. The board also set a target allocation of $100 million for private debt investments.

Alaska has a 6 percent target for private equity. The program was valued at about $5.2 billion as of June 30, according to financial documents.

The former director of the Permanent Fund, Mike Burns, left his post in June for health reasons and died the following month. Burns was replaced by CFO Valerie Mertz on an interim basis.

Photo courtesy of Shutterstock

Correction: This story incorrectly stated the amount and time frame of the close of Spectrum Equity VII. The fund closed on $1 billion last year. The report has been updated.