Manages the Assets?
The Alaska Department
of Revenue, Treasury Division and the Alaska Permanent Fund Corporation
manage most of the financial assets of the state.
However, each of the state's
independent public corporations except the Alaska Science and
Technology Foundation manages its own cash assets, and the University
of Alaska manages it own endowment funds.
The Treasury Division:
- manages funds used
to finance operation of the state government
- provides staff for
the Alaska State Pension Investment Board (ASPIB) which manages
several public employee retirement funds
- invests a portion
of the University of Alaska Endowment and Exxon Valdez Oil Spill
- manages state endowment
funds not managed by the Permanent Fund Corporation
- manages a portion
of the Alaska Student Loan Fund and various state health and long-term
care insurance funds
The Alaska Permanent
Fund Corporation is responsible for investing the
- Alaska Permanent Fund
- Mental Health Trust
- Alaska Science and
Technology Endowment Fund
- International Trade
and Business Development Fund
required by law, the individual state funds are pooled for investment
purposes to maximize their earning potential by taking advantage
of economies of scale and allowing the smaller funds to participate
in investment opportunities that would otherwise be unavailable
allocation of assets is based on several criteria including the
return objectives, risk tolerance, liquidity requirements, and legal
requirements for each individual fund. For example, where the state
needs to spend the assets of a fund relatively soon—in other words,
where the fund has a short-term investment horizon—the fund should
be invested in assets such as short-term government securities whose
value is unlikely to decline substantially in the near term. If
the fund has a relatively long-term investment horizon, it is appropriate
to invest a portion of the fund in riskier assets, such as stocks.
Riskier assets are more likely to decline substantially in value
in the near term but are also more likely to earn higher returns
over the longer term.
investments managed by the Treasury Division are invested in one
of three types of investment pools:
Fixed Income Pool. Assets in this pool are "...
comprised of money market instruments, U.S. Treasuries, mortgage-
and asset-backed securities, corporate debt, and other U.S. dollar
denominated bonds." Individual fixed rate secruities in this
pool are limited to 14 months to maturity.
Fixed Income Pool. Assets of this pool are "...
U.S. Treasuries, U.S. Government agency debt, corporate bonds, mortgage-
and asset-backed securities, other U.S. dollar denominated bonds,
and an equity ownership in the Short-term Fixed Income Pool."
Market Fixed Income Pool. Assets of this pool
are "... comprised of U.S. Treasuries, U.S. Government agency
debt, corporate bonds, mortgage- and asset-backed securities, other
U.S. dollar denominated bonds, and an equity ownership in the Short-term
Fixed Income Pool."
Alaska Permanent Fund is invested in a portfolio of U.S. and foreign
stocks, corporate and U.S. government bonds, U.S. real estate, and
certificates of deposit of Alaska banks. Alaska law places upper
limits on the portion of the portfolio that can be allocated to
stocks (currently 55 percent), real estate, and certificates of
deposit. The corporation establishes targets for the allocation
of the portfolio from time to time to meet their long-run goal of
a 5 percent rate of return after taking into account inflation.
information on Department of Revenue, Treasury Division's investment
process and investment policies for each fund can be found in Investment
Policies and Procedures Manual.
on investments managed by the Alaska Permanent Fund Corporation
can be found on their web site, http://www.apfc.org.
of the funds managed by the Treasury Department—about 120—are
lumped together into what is known as the GeFONSI pool, which means
the "General Fund and Other Nonsegregated Investments."
Most of these funds are small, and the balance in this Pool is about
$1 billion, of which the General Fund, at about $300 million, is
the funds in the GeFONSI Pool distribute their earned income to
the General Fund and the other half retain their income. Click
for a more complete description of the GeFONSI and the funds that
Alaska Department of Revenue, Spring
2002 Revenue Sources Book, State
of Alaska, Department of Revenue Treasury Division, "Invested
Assets Under the Investment Authority of the Commissioner of Revenue,
Combined Financial Statements," June 30, 2001 or go to
the Financial Statements Section on http://www.revenue.state.ak.us/treasury/.