Marcus Frampton, chief investment officer of the Alaska Permanent Fund Corporation, explains how investments in hedge funds support all Alaskans by helping fund the annual dividend program and government services across the state.
Key Takeaways:
- The Alaska Permanent Fund Corporation is a roughly $80 billion institutional investment fund that invests on behalf of the residents of Alaska to support essential services and a yearly dividend payment for all Alaskans.
- Hedge funds are a part of the Alaska Permanent Fund’s investment strategy because they mitigate market risk and produce returns throughout the economic cycle.
- Hedge funds’ consistent returns regardless of market conditions help keep Alaskans educated and safe. Approximately three of every four dollars spent on essential services in Alaska comes from the Permanent Fund.
Transcript:
[00.05-00.10}: I’m Marcus Frampton; I’m the Chief Investment Officer of the Alaska Permanent Fund Corporation.
[00.10-00.20]: The Alaska Permanent Fund Corporation is a roughly $80 billion institutional investment fund that invests on behalf of the residents of the state of Alaska.
[00.21-00.26]: The Permanent Fund has two primary ways that we benefit our stakeholders, the people of Alaska.
[00.27-00.37]: One is a very long-standing dividend program that we have where every resident of the state receives an annual dividend based on our investment returns.
[00.38-00:45]: For everyone in the state, it’s a critically important source of income and is used in a very wide range of purposes.
[00:45-00:58]: We’ve got people living out in the bush for who it’s very important for their fuel purchases, or someone living a more urban lifestyle in Anchorage who might be paying their child’s college tuition with the dividend.
[00:58-01.12]: The second way we benefit our stakeholders is by funding state budgets. So about three out of four dollars spent in the state on essential services are derived from our fund.
[01.13-01.26]: Hedge funds are probably the most important to us from a risk standpoint because they can make money in a down market. They have more ability to be nimble and to position in both ways than our traditional stock and bond managers.
[01.27-01.44]: In periods where stocks decline or bonds aren’t earning us the income that maybe they were in past years, hedge funds can make income for us so that we can continue to pay the dividend, and we can continue to fund state services that are so important to people that live in the state.
