Board approves new stock manager search
September 28, 2012
Callan Associates, the Board’s general consultant, reported that the Permanent Fund returned -0.01 for the fiscal year 2012, ending on June 30 with a value of $40.3 billion. Adverse conditions in the overseas stock markets produced a noticeable drag on the Fund’s performance, but solid returns in the bond and real estate portfolios helped counteract those losses. The Fund’s alternative assets had mixed performance for the period.
“We are pleased with how our bond and real estate portfolios performed over the last year, but stocks make up half of the portfolio so they were the greater determinate of the Fund’s total return,” said Board Chair Bill Moran. “An essentially flat return shows the power of a diversified portfolio, as our bond and real estate investments were able to prevent the Fund from experiencing a significant loss.
The Board reviewed the structure of the Permanent Fund’s stock portfolio, noting that a significant portion of the portfolio is in core strategy mandates. Following a recommendation by staff, they approved a search for U.S. large cap managers with disciplined slants toward growth or value stocks. The Board approved hiring three to five managers with starting mandates in the $50 to $100 million range. Funding for these new mandates will come from rebalancing within the stock portfolio.
On the first day of the annual meeting the Board hosted an economic forum on the affect of Europe’s financial difficulties on emerging markets. The Board also reviewed presentations on the following topics during the two-day meeting:
The Board’s next regular meeting will be held November 28 and 29 in Anchorage.
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