APFC targeting $750m for private debt, infra in FY2018

The private income allocation category has already surpassed the $700m target the limited partner set for fiscal year 2017.

The Alaska Permanent Fund Corporation plans to deploy a target amount of $750 million for its allocation category that includes private credit for fiscal year 2018.

The $58.58 billion sovereign wealth fund will pour that amount into its private income bucket, which along with private debt includes infrastructure, timber, income-related special opportunities, direct investments and joint ventures, according to documents from the 16 May board meeting. The total allocation to that portfolio is $1 billion, which allows for “flexibility given the lumpy nature of some opportunities”, a memorandum read.

In fiscal year 2017, APFC had set a $700 million target for private income and a maximum target of $900 million.  So far, the fund has committed $754 million, with $525 million to infrastructure, $229 million to private credit and $25 million to special opportunities. The fund’s fiscal year starts 1 July and ends 30 June.

An APFC spokeswoman declined to comment.

The private debt commitments were $100 million to LBC Credit Partners, $50 million to TSSP Adjacent Opportunities Partners, $29 million to Atalaya Asset Income Fund III and a pending $25 million to an unnamed opportunistic credit manager.

Infrastructure investments included a $250 million commitment to CIM Infrastructure Fund II, $75 million to Actis Energy IV and a pending $80 contribution to US P3 Fund. Direct investments or co-investments in infrastructure were $100 million to Gas Natural and $20 million to Terminal Investments. The lone special opportunities commitment was $25 million to Athyrium Opportunities Fund III.

The increase in private income allocation comes as APFC looks to increase that allocation category from a target of 5 percent of the portfolio to 9 percent, a shift that it hopes to hit in 2021. Private income currently makes up 5.2 percent of the $58 billion fund. Each fiscal year the target will creep up by 1 percent, meaning in fiscal years 2018, 2019 and 2020, the goals will be, respectively, 6, 7, and 8 percent.