The Board of Trustees of the Alaska Permanent Fund Corporation
(“APFC”) held a meeting in Fairbanks and via Teams Webinar on July
24, 2024. Board action items included the approval of APFC’s
Investment Policy Statement (IPS), which includes the new FY25
asset allocation and adoption of additional staff-proposed edits.
Following reports from the Audit and Governance Committees during
today’s meeting, the Board voted to approve several governance
changes and requested staff and advisors continue working on
governance practices and protocols to bring forward at upcoming
meetings.
The Board elected new corporate officers and committee
assignments and voted in Trustee Jason Brune as Chair and Trustee
Adam Crum as Vice Chair. The Vice Chair serves as the Chair of the
Governance Committee, and Trustee Ryan Anderson was appointed to
Chair the Audit Committee. Trustee Ellie Rubenstein also announced
her resignation from the Board of Trustees, effective August 1,
2024, and expressed gratitude to her colleagues and staff for the
work accomplished during her tenure on the Board. Trustee
Rubenstein served as Vice Chair of the Board and Chair of the
Governance Committee from September 2023 to July 2024.
Chair Jason Brune remarked, “As Trustees, our service to
Alaskans ensures that a portion of our State’s resource wealth
benefits all generations. I would like to thank Trustee Schutt for
his deep-rooted commitment to the Fund throughout his chairmanship;
we are honored that he has been reappointed to the Board to
continue his legacy of service.”
“As we heard today, Trustee Rubenstein will be resigning from
the Board of Trustees. It has been an absolute honor to serve
alongside her. I profoundly respect her professionalism, expertise,
and commitment to our work on behalf of Alaskans. I am confident
that her vision and dedication to advancing modern endowment best
practices have significantly strengthened both the Fund and the
Corporation.”
Governance Committee Recommendations
APFC announced last week that the Governance Committee had
convened to advance ongoing efforts to enhance the Corporation's
governance practices and bring them forth for the full Board's
consideration. Today, the Board voted unanimously to adopt a
revised Communications Policy to provide clear direction regarding
the current investment referral process and protocols regarding
staff communications.
The Board also discussed conceptual amendments to the existing
Charters and Governance Policies, directing staff and advisors to
continue updating the Investment Advisory Group scope, developing a
formalized provision to expand the Audit Committee's purview to
include cybersecurity and ethics, and consolidating policies into a
comprehensive, updated governance manual. The Board requested that
staff forward this work to bring it back before the Board for
consideration during the September Annual meeting.
CEO Deven Mitchell noted, “As a staff, we remain dedicated to
improving governance and appreciate the Board’s diligence in
providing guidance on updating policies to align APFC's governance
framework with industry best practices in support of the
organization's mission to invest and manage the assets of the
Alaska Permanent Fund.”
Investment Policy Updates
Following a presentation from APFC Chief Risk and Compliance
Officer Sebastian Vadakumcherry, the Board approved several changes
to its IPS to clarify the investment process guidelines for
reporting and benchmarking and improve documentation processes,
categorization, and general strategy guidelines. The IPS now
includes the updated FY25 asset allocation, which was unanimously
approved by the Board during the May 31, 2024, Quarterly Meeting.
These ongoing updates are intended to ensure that the IPS reflects
the latest investment best practices.
“These edits to the Investment Policy Statement improve upon our
best practices and provide more clarity for our team, enabling us
to be as efficient and thorough as possible when it comes to our
investment reporting and benchmarking,” said Mr. Vadakumcherry.
Private Equity
Allen Waldrop, Deputy CIO-Private Markets, and Steven Gagliardo,
Senior Associate, provided an update on recent developments in the
private equity program, including an overview of the program’s
strategy, approach and performance.
While shorter-term year-over-year declines in the portfolio have
outpaced declines in the benchmarks, the private equity portfolio
has continued to outperform over the long term. To maintain
appropriate diversification and manage a larger team, APFC has
identified several changes to portfolio construction and the
investment process. These include increasing exposure to buyout
strategies targeting a broader range of industries, reducing and
refocusing commitments to venture capital, and standardizing
procedures for investment approval, due diligence, fund review, and
communication with managers. The portfolio will continue to invest
globally but will primarily focus on investing in the developed
markets of the U.S. and Europe.
“While performance over the last fiscal year did not keep pace
with our benchmarks, our approach is working long term, and our
results remain strong,” said Mr. Waldrop. “As a leading investor in
private equity, APFC will continue to be highly selective in
choosing managers in which to invest. With an expanded team,
process improvements, and system enhancements, we are well
positioned to continue building a diversified, global private
equity portfolio to the benefit of all Alaskans.”
To complement the Private Equity overview, executives from two
private equity firms in which APFC is an investor – Platinum Equity
and Altas Partners – each provided an overview of their
organization and team, investing strategy and approach, portfolio
and performance.
Update on Independent Review
During an executive session, the Board received status updates
on the third-party independent review, which was authorized during
the May Quarterly Meeting. The Board returned on the record and
concluded that this review process will now be conducted at the
staff level.
Update on Security Review
The Board continued their diligence in reviewing the security of
APFC’s information technology security measures during an executive
session.
Training/Travel Budget Transfer
Underscoring the Board’s commitment to providing meaningful
training opportunities – including the travel necessary to
participate in training sessions, the Board authorized a transfer
to the travel budget line. It is essential that APFC staff have
adequate resources to cover expenses for training and travel.
PMP Update
The Board voted to approve the Corporation’s updated Personnel
Management Plan (PMP) provided by staff. The PMP is essential for
ensuring that policies align with organizational culture and the
expectations of accountability for a public corporation. As such,
it was important for the Board to affirm personnel management best
practices through their approval of the PMP.
The next meetings of the Board of Trustees will be the Audit
Committee and the Board’s budget work session on September 5, 2024,
in Juneau, Alaska and online via Teams. Meeting information can be
found at Board of Trustees Meetings-APFC.
About APFC
APFC was created by the Alaska State Legislature in 1980 as an
independent state entity tasked with managing the assets of the
Alaska Permanent Fund on behalf of current and future generations
of Alaskans and other funds designated by law.
The Alaska Permanent Fund is a globally recognized sovereign
wealth fund established in 1976 by Alaskans to preserve and convert
the State's non-renewable mineral and oil wealth into a renewable
financial resource for generations of Alaskans.
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version on businesswire.com: https://www.businesswire.com/news/home/20240725481469/en/
Paulyn Swanson 907.796.1520 – pswanson@apfc.org Maggie Duffy
617.686.5705 – Maggie.Duffy@BackBayCommunications.com