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Alaska Permanent Fund Board to Authorize Expansion of Internal Efforts

alaskaGlobally and gradually, sovereign wealth funds and large public pensions are analyzing the benefits of internal asset management. At a recent meeting, the Alaska Permanent Fund Corporation Board of Trustees made some modifications to the fund’s investment policy. Some major changes include the authorization to create three new internally managed programs for public equities, co-investment absolute return funds and co-investment of private equity.

“Over the last 35 years, the Board has taken a deliberate approach to introducing new programs, starting with narrow parameters and leveraging the abilities of external management firms,” said APFC Board Chair Bill Moran via press release. “As the Fund grows in size, it starts to make fiscal sense to bring investments in-house when we feel our ability is comparable to our external managers. If we can match their performance, we can keep our exposure to existing asset classes at target levels while paying lower fees over time.”

The trustees of the Alaska Permanent Fund feel success has been achieved with bringing infrastructure co-investments in-house. They also brought in non-U.S. bonds internally.

The private equity co-investment program will be the first to be implemented. At first the program will use third-party co-investment fiduciaries. After a select period of time, the fund is authorized to embark on co-investments alongside current private equity managers.

Fiscal Year 2014 Commitments

  • US$ 250 million – Third-party managed co-investment funds
  • US$ 200 million – Internal co-investment alongside current private equity fund investments
  • US$ 775 million – Increase in private equity investments adding to the US$ 4 billion commitment
  • US$ 400 million – For existing infrastructure funds

UNICEF and NBIM to Host Meetings on Children’s Human Rights

The United Nations Children’s Fund (UNICEF), a United Nations programme headquartered in New York City, has partnered with Norges Bank Investment Management (NBIM) to facilitate a series of meetings between companies to discuss issues surrounding children’s human rights.

According to the news release, “the network will facilitate dialogue between leading brands and retailers in the garment and footwear industry to strengthen children’s rights.”

NBIM is invested in many listed companies and have invited them to join a network to tackle these issues. Over the next two years, the organizations plan to hold three workshops as well as quarterly meetings surrounding these issues.

“Over time, we hope and expect that the network will contribute to improved market practices among companies and greater respect for children’s rights,” says Carine Smith Ihenacho, Global Head of Ownership Strategies, in a NBIM press release.

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SouthGobi’s CEO Arrested, CIC Struggles with Investment

The China Investment Corporation (CIC) has long struggled with its investments in coal assets, specifically in globally-listed coal miner SouthGobi Resources Ltd, which operates its flagship coal mine in Mongolia. In November 2009, CIC and SouthGobi Resources inked a convertible debenture deal. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Qatar Central Bank Deals with MSCI

MSCI, a stock index company whose benchmarks influence investor behavior, has tremendous indirect power impacting the stock markets of smaller economies. In 1988, MSCI released its emerging markets index, a now-widely-used benchmark for many institutional investors wanting access to growth markets. China and South Korea make up the majority of the benchmark, but smaller economies such as Poland, Chile and even Qatar make up other pieces of it.

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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