LANDMARKS IN PERMANENT FUND HISTORY

1969

The Prudhoe Bay oil lease sale brings in $900 million in revenues, a significant windfall for Alaska. Some suggest saving some or all of the $900 million, however it is spent over the next few years on capital projects and programs, such as the Alaska Student Loan program and the Alaska Longevity Bonus program.

 

1974

Construction of the trans-Alaska pipeline begins. Construction lasts 39 months, costs $8 billion including the Marine Terminal in Valdez.

1969 oil lease sale

1976

In November, Alaska voters, by a margin of 75,588 to 38,518, approve Constitutional amendment establishing the Permanent Fund.

Senators Hensley and Adams

1977

On February 28, the Permanent Fund receives its first deposit of dedicated oil revenues totaling $734,000. At first the Fund is invested entirely in bonds. The Legislature begins four years of public discussions regarding whether the Permanent Fund should be managed as an investment fund or as an economic development bank.

1980

The Alaska Legislature creates the Alaska Permanent Fund Corporation, to manage the investments of the Permanent Fund, and places a list of allowed investments into state law. In the photo to the right, Governor Jay Hammond is shown signing the bill creating the APFC. $900 million in surplus oil revenues is deposited in the Permanent Fund by special appropriation.

The Legislature also approves the first Permanent Fund Dividend program. This program was ruled unconstitutional by the United States Supreme Court because individual dividend payments varied based on length of residency.

Gov. Hammond signing APFC bill

1982

The Alaska Legislature, at the request of the Board of Trustees, enacts inflation proofing to protect the Fund’s purchasing power. The first Permanent Fund dividend check of $1,000 is distributed. The Legislature pays this first dividend, not with Permanent Fund income, but with surplus oil revenues.

1983

Following changes to the statutory investment list, the Permanent Fund makes its first investment in the stock market, and later that year, in directly held real estate. At right, Trustee Eric Wohlforth, Representative Gene Therriault and Senator Bert Sharp visit the New York Stock Exchange with in 1998.

1987

Despite the stock market crash in October 1987, the Permanent Fund's performance ranks in the top 9% of all public funds in the U.S. Total annual throughput of oil in the trans Alaska pipeline peaks at 2 million barrels per day.

Trustees at the NYSE
FRANCE

1990

After the Legislature expands the statutory investment list, the Permanent Fund begins to invest in stock and bond markets outside the United States.

 

1993

Permanent Fund assets reach $15 billion.

1998

For the first time ever, Fund earnings exceed state oil revenues as the Fund reaches the $25 billion mark.

1999

The Legislature increases the Fund's investment flexibility to allow up to 5% of the Fund's value to be invested in alternative investments.

2000

The Trustees remain committed to a long-term, diverse investment strategy as the stock market begins a sharp decline that will last for three years. Trustees further diversify the Fund’s investment portfolio and increase the equity allocation to 53 percent.

S&P drop

2001

After careful study and discussion, the Board of Trustees formally endorses a constitutional amendment to change Permanent Fund payouts to a percent of the Fund’s total value (POMV). The first of a series of resolutions that would place this proposed change on a general election ballot are introduced in the Legislature at the Board’s request.

25th anniversary

2002

The Bear market that began in 2000 leads to the Fund’s first negative return in 2002. These market conditions carry through 2003.

At left, former Trustees reminisce about Fund history at the Fund's 25th anniversary celebration

2004

The Permanent Fund invests in two new asset classes: absolute return strategy funds and private equity. The Legislature changes state law to require cause before any of the four public members of the Board of Trustees may be removed, helping insulate the Board members from political pressure.

2005

The Legislature makes a significant change in how Permanent Fund investments are determined by removing the allowed investment list from state law. From now on Trustees will make investment decisions solely under the guidelines of the prudent investor rule. Fund assets reach $30 billion.

2006

The Fund reaches $35 billion in value, an increase of $5 billion from the prior year.

2007

The Trustees add a new asset class, infrastructure, to the Fund's investments. Several years of strong returns carry the Permanent Fund's value to $40 billion.

2008

A correction that began late the year before causes markets to drop dramatically, and makes 2008 one of the five worst years in the 218-year history of the U.S. stock market.

London City Airport
Risk based asset allocation

2009

The Board of Trustees reorganizes the Permanent Fund's investments into risk-based groups, rather than taking the traditional tack of grouping investments by asset class.  Under the new structure, investments are grouped by the market condition that those assets are intended to address.  This better fits the Board's goal of building a portfolio that will provide a more stable return under a variety of conditions. Based on this and other innovative risk management activities, the Alaska Permanent Fund is awarded the aiCIO Industry Innovation Award in the Sovereign Wealth Funds category the following year.

2012-2013

Continuing the evolution of the Permanent Fund’s investments, the Board works to take advantage of the Corporation’s growing capabilities. Programs are created to bring international bond and infrastructure co-investments in-house. And special opportunity investments are added to the Fund, including a program that leases out single family homes across the U.S.