1 THE ALASKA PERMANENT FUND It reports more quickly and in greater detail than any other public or private fund in the country

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10 The Alaska Permanent Fund How is it doing compared to other funds? How about now? As of September 18, 2008 $34 billion September 20, 2007 $34.9 billion Alaska Permanent Fund NACUBO $1 billion Ending FY 06 1-year11.0%15.2% 3-year11.9%15.3% 5-year7.0%8.8% 10-year8.5%11.4%

11 RETURNS COMPARED June 30, 2007 Alaska Permanent Fund New Mexico Land Grant Fund17.9 New Mexico Severance Tax Permanent Fund17.8 Princeton University24.7 June 30, 2008 Alaska Permanent Fund-3.43 Harvard University8.6

12 What are the main issues? What outsiders say The Peterson Sovereign Wealth Fund Report April 2008 A Blueprint for Sovereign Wealth Fund Best Practices Alaska number 10 world wide in size Structure –100 Governance – 80 Accountability and transparency – 100 Behavior – 84 Total: 94

13 Only beaten by the Canadian and New Zealand Pension Funds with 95’s Why the 80 in governance? Probably because it has not adopted ethical guidelines limiting investments in instruments, activities or countries. Why the 84 in behavior? Possibly because no rule or guideline on how it adjusts its portfolio (like using inflows to adjust allocation).

14 Commonwealth North Report November, Called for a new payout formula by statute. 2. Called for a substantial Anchorage office Access Community 3. Called for increased staff compensation. 4. Called for an enhanced Board selection process. Compensation Selection panel 5. Called for increased alternative investments. As of June 30, 2007 Texas 40% Princeton 47% Alaska 14% - Raised to 22% May, 2008

15 Does the current board model work? Can it achieve its goals? Change in investments new categories new complexities

16 Captive investment management companies may be the answer Harvard Investment Management Company fully integrated investment management company 200 employees 2008 return 8.6% Went from $34.9 billion to $36.9 UTIMCO $24 billion August 2007 returns: Perm. University Fund 15.3%, Gen. End. 13.9% nine member board, including 5 independent investment professional 48 employees