Board approves new investments, hires Callan as general consultant
MAY 25 - The Alaska Permanent Fund Corporation Board of Trustees approved continued investigation into a $400 million commitment to a single-family homes strategy, appointed Callan Associates as its general consultant and added $1.2 billion to the Fund’s private asset allocations at its regular meeting in Anchorage this week.
Under the single-family homes strategy, a company would purchase packages of vacant homes in the lower 48 and manage those homes as rental properties. The Fund would not purchase or directly own the properties, but subject to further negotiation would provide up to a $400 million investment to American Homes 4 Rent LLC, which already owns 1,000 single family homes.
“The reported shift in consumer interest from owning homes to renting, combined with the surplus of single-family homes in many markets has created this unique opportunity,” said Board Chair Bill Moran. “When we created the allocation to Special Opportunities, the purpose was to create room within the Fund where we could take advantage of unexpected investment opportunities such as this single-family homes strategy.”
This spring, APFC issued a request for proposals for general investment consulting services. Extensive proposals submitted by the offerors covered the experience of the firms and their individual staff members, as well as their processes, procedures and policies. After a review of these proposals, Callan Associates had the best cumulative scores of all of the candidates with regard to both service and cost. Based on these findings, the Board approved offering Callan a three year contract with two one-year renewal options.
“Because the general consultant serves in a fiduciary capacity, we are not required to go through an RFP process to hire a firm,” said Moran. “However, we feel that it is prudent to periodically review the available universe of general consultants to ensure that we are getting the most that we can out of this resource. Callan Associates has provided us with many years of solid service and we look forward to working with them in the future.”
The Board also reviewed the Fund’s private equity and infrastructure programs. As part of the review, staff presented recommendations for new allocations for Fiscal Year 2013, which will begin on July 1 of this year. The Board approved the recommendations, allocating $820 million to private equity and $400 million to infrastructure. Prior to these additions, the APFC had committed $3.4 billion to private equity and $1.4 billion to infrastructure.
The Board’s next regular meeting is its annual meeting, which will be held in Anchorage on September 26 and 27.