Alaska’s Looking To Learn

Ashby Monk

Back in June, I noted that Alaska’s SWF was planning some interesting organizational changes so as to facilitate learning. Specifically, the fund was planning to create a series of “mini-permanent funds” that would allow Alaska’s board to get some insights into how sophisticated asset managers operate.

Pat Forgey had an article yesterday reporting that this plan is now coming into fruition:

“The fund’s Chief Investment Officer Jeff Scott is calling the money managers who will be hired “external CIOs,” and expects each of the four managers will be given $500 million to invest as mini-permanent funds, for a total of $2 billion.”

What’s interesting about this policy is that the managers themselves will choose their own mix of stocks, bonds, and investments that they think will generate the highest returns. These aren’t traditional asset allocations with specific mandates in mind. These four funds will, in effect, be ‘mini-permanent funds’, which the big Permanent Fund will watch closely so as to learn.

It’s a very interesting organizational innovation that I’ll be keeping a close eye on.

4 Responses to “Alaska’s Looking To Learn”

  1. 1 rien huizer December 7, 2009 at 9:44 am

    Will that improve the returns? Or just the total amount of fees paid?

  2. 2 Ashby Monk December 7, 2009 at 2:49 pm

    I view this as Alaska setting up a series of ‘investment laboratories’. There won’t be any tangible short term benefits, but over the long term, the SWF may learn quite a bit. Given the time horizon, this may be a sensible way to improve internal capacity. We’ll see…

  1. 1 Best Practice Investment: An Alaskan Exemplar « Oxford SWF Project Trackback on September 9, 2010 at 8:02 pm
  2. 2 Deep Thoughts By Jeffrey Scott « Oxford SWF Project Trackback on February 1, 2011 at 7:39 am

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This website is a project of Professor Gordon L. Clark and Dr. Ashby Monk of the School of Geography and the Environment at the University of Oxford. Their research on sovereign wealth funds is funded by the Leverhulme Trust and The Rotman International Centre for Pension Management.

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