Board of Trustees for Alaska's SWF Allows Direct Hedge Fund Investment

(March 30, 2010) – The $36.5 Alaska Permanent Fund Corporation (APF) has tweaked its investment policy to permit direct investments in hedge funds as opposed to investing through managed accounts, bypassing “gatekeeper fees.”

The fund’s absolute return policy had restricted it to funds of hedge funds and managed account programs. The board’s decision now allows the sovereign wealth fund to invest directly in hedge funds through its 6% absolute return allocation, which is managed by Crestline Investors, Lazard Asset Management, Mariner Investment Group and Pacific Alternative Asset Management Company (Paamco). APF also had relationships with AQR Capital Management, Bridgewater Associates, Goldman Sachs Asset Management and PIMCO.

“Every [hedge fund] investment we have made so far has been through a managed account-type structure,” said a spokesperson to HFMWeek. “But we can now invest directly in the hedge fund managers we choose.”

Despite its size, the fund lacks the staff and the in-house expertise to make hedge fund manager selections, HFMWeek reported.

In 2009, the fund far exceeded its expected return, earning 18.76% for the year. Yet, its strong performance failed to make up for its nearly 25% loss in 2008.