UNITED STATES - The Alaska Permanent Fund Corporation has approved new commitments for infrastructure totaling $750m (€476.2m).
The pension fund believes infrastructure can produce solid long-term investment returns and will act as a diversifier for its overall investment portfolio.
More specifically, the investor made one commitment of $500m into the Goldman Sachs Institutional Infrastructure Partners II fund as, according to pension funds officials, investors that contribute capital to this fund are projected to achieve returns in the range of 10-15%.
Infrastructure Fund II is targeting a total equity raising in the region of $7.5bn so officials can pursue a wide investment strategy and place capital, for example, in areas such as toll roads and government buildings.
Alaska made has also a $250m allocation into Alinda Capital Partners' Alinda Fund II, which is shooting for a total equity raising of $3.5bn-$5bn.
Pension fund officials have indicated that its return on its global investment in the commingled fund will be around 20% and will see capital invested in markets including the United States and Europe.
Alaska made these commitments at its July 23 board meeting as pension fund officials like the fact that these managers had experience with infrastructure funds and had been successful with their prior funds.
Alaska had a real estate portfolio valued at $4.2bn to July 24 with a targeted allocation of 10% while total plan assets were $37.3bn.
Within its private real estate strategy, the pension fund invests in the four main property types of office, industrial, retail and apartments and invests with several real estate managers including CB Richard Ellis Investors, L&B Realty Advisors and LaSalle Investment Management.
The pension fund also has a public real estate component containing public real estate securities.
AEW Capital Management is its global REIT manager while Wellington Management runs its domestic REIT programme.
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