Alaska Retirement Board makes first foray into infrastructure

NORTH AMERICA – The Alaska Retirement Management Board has made its first foray into infrastructure with commitments totalling $300m (€219m).

The managers for the first commitments will be Industry Funds Management and JP Morgan Asset Management. 

The pension fund is now in negotiations with the two managers on how to split up the allocation. 

Prior to a board meeting, the investor had talked about $200m to IFM and $100m to JP Morgan.

Alaska will be investing capital into IFM’s Global Infrastructure Fund, an open-ended commingled fund. 

According to a pension fund document, the commingled fund has produced an annualised quarterly cash yield since inception of 4.7%.

The fund has a long-term target to divide its portfolio, with 50% in Europe, 50% in North America. 

IFM has already invested capital in several markets in Europe including the UK, Germany and Poland.

As of 30 June, the fund had invested in assets such as airports, telecommunications, electricity and pipelines.

Alaska will also be an investor in the $3bn Infrastructure Investments Fund run by JP Morgan.

The projected yield for investors in the fund over the next three years is 5-7%.

The open-ended, commingled fund has invested in many markets in Europe. 

Around 43% of the portfolio is in the UK and 13% in Continental Europe.  

The fund will invest in infrastructure assets such as transportation, contracted power generation and regulated assets.

Alaska is looking to allocate an additional $150m in infrastructure to publicly traded strategies.

The pension fund is expecting total returns for infrastructure of 10-12% net over the long-term, with a current yield of 5-7%. 

Alaska is also going to explore establishing one or more separate account mandates with its existing core separate account managers focused in the medical office sector. 

An actual allocation for this strategy has not been determined at this time.

The pension fund’s current separate account managers are LaSalle Investment Management, Sentinel Real Estate Corporation, UBS Realty Investors and Cornerstone Real Estate Advisors.