Alaska Bullish On Distressed Strategies

Mar 13 2007 | 10:38am ET

The $37 billion Alaska Permanent Fund Corporation’s board of trustees has authorized an additional commitment of up to $500 million to Crestline Investors’ distressed opportunities fund. Crestline, which was the first absolute return manager hired by the APFC in 2004, currently manages $581 million in the fund’s $1.5 billion absolute return strategies portfolio. 

"Distressed opportunity periods are cyclical in nature, and some are predicting that a new wave may be on the horizon," said Michael Burns, CEO of the APFC. "The board believes that by making a specific commitment to a fund of distressed investment specialists now, the APFC will be prepared to take advantage of opportunities that may appear."

Alaska currently has exposure to distressed investments of approximately $50 million in private equity and $150 million in its absolute return portfolio. The fund currently has $230 million invested in private equity and 4% of its total portfolio allocated to the asset class. Like private equity, the new Crestline allocation will only be invested as opportunities arise and remains invested in bonds in the interim.

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