Alaska Permanent Fund Corp., Juneau, increased its target allocations to private equity, absolute-return strategies, infrastructure and emerging markets equity, and it cut its domestic equity and fixed-income targets as part of a new asset allocation for the $39.2 billion fund.
Private equity and absolute return increased to 6% each, from 4% each; infrastructure was bumped up to 3%, from 2%; and emerging markets equities, which is part of a larger non-U.S. equity allocation, increased to 5% from 4%. Domestic equity is 26%, down from 27%; domestic fixed income is 19%, down from 23%. The remaining asset classes 14% global equity, 13% non-U.S. equity, 10% real estate and 3% international fixed income was unchanged. Within non-U.S. equity, developed markets will decrease by one percentage point to 8% to fund the increase in emerging markets.
The changes, approved at a May 28-29 board meeting, are the result of a yearly review, said Richard Shafer, CIO. The fund also increased its investment portfolios return target to 8.05% from 7.9%. Staff will likely increase the portfolios of its current absolute-return managers but may conduct searches for the other increased asset classes, Mr. Shafer said. He could not provide more details about the timing of the searches. Staff has flexibility and intends to use it, he said.
Separately, the board extended the contract of general consultant Callan Associates for one year. Callans three-year contract expires June 30 but includes options for two, one-year extensions, Mr. Shafer said.