FUND NEWS                               Feb 19, 2009

APFC Board endorses Sudan divestment legislation

FEB 19 - The Alaska Permanent Fund Corporation Board of Trustees endorsed legislation introduced by Governor Palin this year that would require divestment of directly-held companies doing business in Sudan. The legislation was discussed as part of a regular two-day meeting in Juneau on Wednesday and Thursday.

“We appreciate that the situation in Sudan is unique because it has been labeled as genocide by the federal government, and in particular because Congress passed safe harbor legislation last year allowing fiduciaries to make this particular divestment,” said Board Chair Steve Frank. “We respect that Alaska’s elected officials have the authority to make the final call on a divestment policy, and our preference is for legislation that has the least impact on the investments of the Fund, in accordance with our role as fiduciaries.”

During the two day meeting, the Board reviewed the performance of the Fund in whole, and the performance and concerns for each asset class individually. Michael O’Leary, of Callan Associates, also provided the Board with Callan’s five-year capital market outlook, which will help the Board to determine what changes might need to be made to the asset allocation at the meeting in May.

As part of the alternative assets review, the Board decided not to move forward with two planned alternative investments in light of changes to the Fund’s value, and the need to balance toward core asset classes. The two funds that were set aside were a small/mid-cap private equity fund managed by Pathway and the Alinda II infrastructure fund. Both of these investments had been approved at the July 24, 2008 meeting.

The Board also hired a new board adviser, George Zinn, who also serves as Corporate Vice President and Treasurer of Microsoft. The Board has three external advisors to provide independent advice from professionals with significant, direct experience in the management and operation of large investment funds.

The next board meeting will be held May 20 & 21 in Anchorage.