August 8, 2013 | Vol. 39, No. 32

Alaska Permanent Fund ends year with $44.9B value

JUNEAU (AP) — The Alaska Permanent Fund posted its highest year-ending balance, with a preliminary value of $44.9 billion.

While the fund has reached higher levels during the year — its unaudited value as of Thursday was $46.3 billion — it has never ended a fiscal year so strongly, Alaska Permanent Fund Corp. CEO Michael Burns said.

“This is a good year,” he said Monday.

The fund, created to share Alaska's oil wealth with future generations, reported an average return of 10.5 percent for the year ending June 30, with all its asset classes yielding positive returns. It had closed 2012 at $40.3 billion, on an essentially flat return.

Burns said U.S. markets are substantially above where they were before the financial meltdown and Great Recession. The corporation reported that the fund's U.S. stock portfolio alone gained 22.4 percent for 2013.

Real estate is another component of the fund's portfolio, and during the year, the corporation bought about 4,800 single-family homes in foreclosure sales around the country and put those homes in a real estate investment fund that recently went public, Burns said. Some of the current renters once owned the homes they're now living in, he said.

The corporation expects to transfer $604 million to the state Permanent Fund Dividend division for checks this year. That compares to $605 million last year and would be the lowest transfer since fiscal year 2005, when it was $532 million.

The amount of investment earnings allocated to dividends is based on a five-year rolling average of Permanent Fund performance. The average includes 2009, during the recession, when the fund posted a $2.5-billion net loss in statutory net income, its first such loss.

According to the Permanent Fund division, last year's dividend was $878, the lowest since 2005, when it was $845.76. Division operations manager Sara Race said there were slightly fewer applicants this year than last though she said the calculations have not yet been done that will determine this year's dividend.

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