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Foundation and sovereign wealth fund delegates gather at the Business of Clean Energy in Alaska conference

Lisa Hagerman, Tuesday, May 19th, 2009

The Business of Clean Energy in Alaska conference took place this week in Anchorage to showcase the opportunities available for Alaska in building an Energy Efficiency and Renewable Energy infrastructure. The conference was organized by the Alaska Renewable Energy Project with sponsorship from, among others, the Alaska Conservation Foundation. The two-day event brought together close to 200 business leaders, state legislators, venture capitalists and investors from Alaska and across the country. A panel on the Alaska Permanent Fund included: Pat Galvin, Commissioner, State of Alaska Department of Revenue, and on the Board of the Alaska Permanent Fund, Hege Eliassen, Counselor of Financial Affairs at the Royal Norwegian Embassy representing the Norwegian Government Sovereign Wealth Fund-Global, and Lisa Hagerman from the Boston College Institute for Responsible Investment with examples of other investors across foundations, public pension funds, and sovereign wealth funds. Presentations will soon be available at Renewable Energy Alaska.

Pat Galvin gave an overview of the structure and current asset allocation (See current asset allocation distribution on website) of the Permanent fund that as of May 2009 holds $30.4 billion in assets (unaudited). The Fund was established in the 1970s by constitutional amendment in which, “At least 25 percent of all mineral lease rentals, royalties, royalty sales proceeds, federal mineral revenue-sharing payments and bonuses received by the state be placed in a permanent fund, the principal of which may only be used for income-producing investments." In 1982, the Legislature established the Alaska Permanent Fund Corporation to manage fund investments. A six-member, governor-appointed Board of Trustees oversees APFC, in which Pat Galvin sits on the board. APFC is a state-owned corporation, based in Juneau, that also manages other funds designated by law, such as the Alaska Mental Health Trust Fund cash assets.

The discussion moderated by Steve Lindbeck, Alaska Public Communications, shared examples across Norway’s Global Fund, one of the world’s largest sovereign wealth funds with $300 billion in assets, that maintains a long-term investment perspective and in April 2009 after evaluation of existing ethical guidelines the government decided to consider environmental, social, and governance factors be integrated to an even greater extent in all aspects of the fund's management. A recent NYT article (May 14, 2009)  highlights the virtues of Norway’s long-term investment strategy as they can take on illiquid long-term positions given their future liabilities structure. The intent of the panel was to show examples of other institutional investors in the US and overseas as a reference for the possibility of using the Alaska Permanent Fund to help secure financing needed for Alaska-based projects. The discussion started the conversation and was timely as the Alaska Permanent Fund held a public board meeting to review the fund’s investment asset allocation policy the following two-days May 20-21. See may 20 board meeting agenda.
 

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