Government Fund Weekly News Roundup — Alaska’s SWF Appoints New CIO

April 01, 2016 by SWC Editors

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Russell Read

APFC's New CIO, Russell Read

In the news this week: The Alaska Permanent Fund Corp. appoints Russell Read as its new CIO. Singapore’s GIC and the Netherlands’ APG Groep invest in India. And Ontario Teachers’ Pension Plan and Abu Dhabi’s Mubadala Development Co. announce their annual results.

Russell Read Joins APFC

After a six-month recruitment process, Alaska Permanent Fund Corp. (APFC), the agency that manages the U.S. state’s sovereign wealth fund, has appointed Russell Read as its new chief investment officer.

Read has extensive experience in leading public investment organizations. He served as CIO of the $287.5 billion California Public Employees' Retirement System (CalPERS), the biggest U.S. public pension fund, for two years between 2006 and 2008. After leaving CalPERS, he was CIO of the Gulf Investment Corp., a multinational financial institution co-owned by the six countries of the Gulf Cooperation Council, between 2011 and 2015.

Read replaces Jim Parise, who had been serving as acting CIO at APFC. The previous incumbent, Jay Willoughby, left the Alaskan fund to join Radnor, Pennsylvania-based endowment advisor The Investment Fund for Foundations (TIFF) in September 2015. Willoughby wasn’t the only senior executive at APFC to depart in recent months: David Fallace, the fund’s director of strategic opportunities, also left to take up a position at TIFF earlier this year.

For a sovereign wealth fund to lose one senior staff member to a rival institution may be regarded as misfortune. To lose two looks like carelessness. But APFC’s high personnel turnover may reflect the increasing political pressure the fund has faced since the decline in oil prices began to inflict damage on the state’s finances. Alaskan Governor William "Bill" Walker recently proposed transforming APFC into an endowment to directly funnel oil income into the state’s Treasury (although his recommendations have yet to receive legislative approval).

APFC’s remaining staff must hope the appointments of Read and Angela Rodell — who took over as CEO last September — will quell some of the uncertainty surrounding the fund and its governance. 

More Indian Investments

Government funds are continuing to invest in Indian alternative assets. On Wednesday, Singapore’s GIC and Bangalore-based real estate developer Brigade Group announced the acquisition of a 16-acre commercial property in Chennai for INR 5.38 billion ($80.9 million). The two parties formed a special-purpose vehicle to buy the site from Mumbai-based industrial paint company Kansai Nerolac Paints and plan to create a mixed-use development comprising residential units and offices.

Meanwhile, APG Groep, the organization that oversees about $460 billion on behalf of Dutch government pension funds, has teamed up with Mumbai-based conglomerate Piramal Enterprises to invest in Indian solar-energy company Essel Green Energy. The partners will invest a total of $132 million in the firm, which is a subsidiary of Indian conglomerate Essel Group.

Funds Reveal 2015 Results

Ontario Teachers' Pension Plan (OTPP) achieved an impressive investment return of 13 percent during 2015, according to the fund's latest annual report. OTPP earned C$19.6 billion ($14.1 billion) over the year, bringing its overall assets to C$171.4 billion ($123.7 billion). The fund's growth was driven by the strong performance of its private-market investments, which rose by 32 percent, and its infrastructure portfolio, which delivered a return of 21 percent.

Abu Dhabi’s Mubadala Development Co. also announced its annual performance figures this week. Mubadala's revenue totaled 34.1 billion dirhams ($9.2 billion) over the year — up slightly from the AED 32.7 billion figure for 2014. Mubadala recorded profits of AED 1.2 billion during 2015, compared with AED 1 billion in 2014, after receiving higher income from its healthcare, manufacturing and real estate businesses. As of December 31, 2015, the fund’s overall assets stood at AED 246.4 billion.

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