Alaska Permanent Fund Corp., Juneau, created a pool of active domestic small-cap equity managers to add alpha to the $30 billion fund, said Richard Shafer, CIO. Nine new managers were added: DuPont Capital Management, Jennison Associates, Luther King Capital Management, PENN Capital Management, Kalmar Investments, Voyageur Asset Management, Washington Capital Management, Forstmann-Leff and Peregrine Capital Management. Three firms that already run a total of $400 million in domestic small-cap portfolios were also added to the pool: Martingale Asset Management, Turner Asset Management and Cordillera Asset Management. Callan Associates assisted.
The managers are replacing Capital Guardian, which was terminated from a $545 million active domestic small-cap equity portfolio for performance, Mr. Shafer said. CapGuardian continues to run an $800 million active EAFE portfolio and a $400 million active emerging market portfolio for the Alaska fund. Chuck Freadhoff, CapGuardian spokesman, said it is the firm's policy not to discuss clients and their actions.
Managers in the pool will start out "more of less evenly funded," said Mr. Shafer. "As we start to track the performance of the portfolios, we'll be looking for whatever style bias there is and seek to address that." The program will be implemented as soon as contracts are signed.
Separately, the board instructed its staff to talk to legislators about giving the fund allow greater flexibility in choosing investments. Current law specifies the permitted investments for the Alaska Permanent Fund, and a basket clause allows up to 10% of the fund to be invested in items not on the list, including private equity and other alternatives. This leaves "little room … available for new assets types or growth in existing assets beyond current limits," Alaska fund officials said in a news release.