Alaska Permanent Fund OKs Direct Hedge Fund Investments

Mar 29 2010 | 12:54pm ET

Add the Alaska Permanent Fund to the list of institutional investors adding direct hedge-fund investing to their repertoire.

The $36.5 billion fund’s absolute return policy has restricted it to funds of hedge funds and managed account programs. But its board of trustees has now approved direct investments in hedge funds from the APF’s 6% absolute return allocation, HFMWeek reports.

The Alaska fund has never actually invested in funds of funds, and is likely to use its new ability to invest in hedge funds that it already has exposure to through one of its existing hedge fund portfolio managers. According to HFMWeek, the fund does not yet have the in-house capability to conduct its own searches.

The APF also extolled the fee-saving benefits of investing directly in hedge funds, rather than through managed accounts.

The fund’s current alternative investment portfolios are managed by Crestline Investors, Lazard Asset Management, Mariner Investment Group and Pacific Alternative Asset Management. APF also relationships with AQR Capital Management, Bridgewater Associates, Goldman Sachs Asset Management and PIMCO.

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