Wednesday, January 4, 2023

Alaska Permanent Fund CIO Cites Overvalued PEUs

Chief Investment Officer

“I’m as bearish on private equity as I have ever been in my career,” Marcus Frampton, CIO of the Alaska Permanent Fund (assets: $78 billion), told his board at a recent meeting, per news reports. “We haven’t seen the correction in private equity as we have in public markets.”

He added that PE has become increasingly expensive and that many PE asset valuations were too high and needed adjusting. The fund has been overweight PE, but he plans to reassess that allocation in coming months, perhaps reducing it by four percentage points.
The Alaska Permanent Fund gave $825 million to The Carlyle Group for investing.  The fund put money into Carlyle funds in 2013 and 2019.

Carlyle Group co-founder David Rubenstein's daughter Ellie was appointed to the Alaska Permanent Fund board last summer.  She runs Manna Tree Partners, also a private equity underwriter (PEU).

Update 1-5-23:  Institutional Investor ran a piece on PEU valuations. 

Speaking on a panel before an audience of institutional investors in New York, Rockefeller University investment chief Paula Volent noted that two of the endowment’s private investment managers held pieces of the same portfolio company — and that those managers had assigned that company completely different valuations.

Gotta love that leverage only cuts one way for the PEU boys.  It can rapidly raise asset prices but so far is immune to valuation meltdowns.  Sounds a little "fraud-ish."