Alaska Permanent Awards EM Mandates | Chief Investment Officer

(November 25, 2013) — Four new emerging market equity mandates have been awarded by the Alaska Permanent Fund Corporation (APFC) after the fund decided it needed to diversify the asset class further.

The APFC fund has $3.2 billion in emerging market stocks, according to its annual report from September 2013, and has awarded $100 million mandates to each of the four new managers.

In the growth style section of its emerging market equities, APFC appointed JP Morgan and William Blair, while Lee Munder Capital Management and Delaware Investments received mandates for the value style section.

Selective rebalancing within existing mandates will provide the funds for the new mandates, and no existing manager contracts were terminated.

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The emerging market equities sector of APFC’s portfolio endured a tough year in 2013, but managed to outperform its benchmark.

As investor sentiment drove away from emerging market stocks following a slowdown in the Chinese economy, APFC’s emerging equities returned 3.8%, versus a 3.2% benchmark.

The annual report also showed the total returns for the fiscal year reached 10.9%, resulting in assets under management of $44.9 billion.

Jay Willoughby, CIO of the Alaska Permanent Fund Corporation, ranked 28 on this year’s Power 100.

In 2011 APFC introduced an external CIO program, which saw funds allocated to Bridgewater Associates, Goldman Sachs Asset Management, GMO, PIMCO, and AQR. The firms were given broad mandates to invest across traditional portfolio buckets.

This year Willoughby added Carlyle to that list, allocating $750 million to the private-equity giant to focus on energy investments.

(November 25, 2013)— A year of strong investment returns has helped the New York Public Library’s (NYPL) endowment reach $1 billion in assets for the first time in its history.

The fund was recorded as having $1.01 billion as of October 31, coming off the back of a 15.3% investment return for the year ended in June.

Despite the achievement, Edgar Wachenheim III, chairman of the investment committee, told the Wall Street Journal that the fund was still “not nearly enough” to supply the various projects in the pipeline for next year, including a $300 million renovation and a real-estate consolidation.

Income from the endowment supports the system’s research libraries, including the flagship building on Fifth Avenue, the Schomburg Center for Research in Black Culture in Harlem, and the Library for the Performing Arts at the Lincoln Center.

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The research library budget was $112 million in 2002, which adjusted for inflation would be $145 million in today’s money, library officials told the newspaper. But the research library budget today is $120 million—leaving a $25 million gap.

Much of this deficit comes from the hits the library system, like other New York cultural organizations, has suffered in budget cuts over the past few years.

The NYPL funds are managed between 15 and 20 different firms, and are exposed more to equities than many other endowments, Wachenheim said.

According to its 2013 annual report, published in June 2013, the fund had $185.1 million in domestic equities, $297.6 million in global equities, $96million in long/short equity funds, and $69.9 million in private equity.

Its investments are split between managed accounts (18.5% of the portfolio), commingled investment accounts (47%), hedge funds (24.6%), and private market funds (9.9%). More information on its investments can be found here.

NYPL like other public libraries depends heavily on city funding, but it has been able to diversify its funding source with only 57% of its overall budget coming from New York City funding, according to research from the Wilmington Trust.

This is low compared with neighbouring Queens Borough Public Library and Brooklyn Public Library, which both have city funding making up 82% of their overall budget.

Other funding sources include state and federal contributions, along with the funds’ investment returns. Here too, NYPL outperformed its neighbours with a 16% investment return in 2012, compared to 0.5% at Queens Borough Public Library and a loss of 0.6% at Brooklyn Public Library.

aiCIO will be hosting this year’s Innovation Awards Dinner at the NYPL on December 9. At the dinner Britt Harris, CIO of the Teacher Retirement System of Texas, will be presented with the Lifetime Achievement Award, and the members of the class of 2013 will be revealed. Click here for more information.