28/07/2010 Author: Kapila Gohel

Alaska SWF invests $20m in Goldman fund

The $36.5bn Alaska Permanent Fund Corporation (APFC) has committed around $20m to absolute return strategy Goldman Sachs Investment Partners (GSIP) through an external CIO real return mandate also managed by the same firm.

Due to an SEC rule that states a firm cannot direct a client’s money into a fund that they own 20% or more of without consent, Goldman Sachs had to ask permission to invest 4% of the $500m real return mandate it manages for APFC, effectively the Alaskan state’s sovereign wealth fund, into one of its hedge funds.

In fact, APFC has permitted Goldman to implement any rebalancing recommendations they may have up to an additional 4% of the current market value of the real return mandate – essentially allowing an 8% investment.

APFC already invested $15m with GSIP in January this year through one of its hedge fund managers, Crestline Partners. The board was happy to go through with the additional investment due to the fact Crestline had completed “their customary due diligence review, both on performance and operation, independent to the real return mandate with Goldman”, according to the minutes of an APFC board meeting.

APFC has five CIO/real return mandates of $500m each managed by AQR Capital Management, Bridgewater Associates, Goldman Sachs Asset Management and Pacific Investment Management Company (Pimco), which are also fiduciaries and must act in the best interest of the fund.  

Earlier this year, the board made the decision to allow APFC to make direct investments in hedge funds, HFMWeek revealed exclusively in March.