05/02/1994 05:05 PM Senate HES

 CHAIRMAN RIEGER brought  HB 234  (UNIVERSITY OF AK ENDOWMENT TRUST            
 FUND) before the committee as the final order of business.  He                
 explained the legislation will transfer the management of the                 
 University of Alaska Endowment Trust Fund from the Commissioner of            
 Revenue to the fiduciary responsibility of the President of the               
 University of Alaska.                                                         
                                                                               
 Number 043                                                                    
                                                                               
 SENATOR LEMAN asked what the University of Alaska is going to do              
 that is different from the Department of Revenue.                             
                                                                               
 ALLISON ELGEE, Budget Director, University of Alaska, referred to             
 information contained in the members' packets detailing the                   
 investment returns by the Department of Revenue and annotated a               
 comparison of the investment returns that the University of Alaska            
 has received during the same time period for the foundation                   
 account.  Both performances have been rated by outside firms: the             
 Department of Revenue ranks in the bottom one percent nationwide              
 for this type of an account, whereas the University's five-year               
 period performance ranks in the top three percent.                            
                                                                               
 Ms. Elgee said the major difference in investment philosophy is               
 that the Department of Revenue maintains the majority of these                
 investments in fixed income accounts.  The University uses a more             
 flexible and active management style with their foundation account.           
                                                                               
 Number 081                                                                    
                                                                               
 CHAIRMAN RIEGER said he has had concerns that the Department of               
 Revenue has been too unbalanced out of equities, in particular,               
 real estate equities.  He agreed that the University will probably            
 do better with the investments.                                               
                                                                               
 Number 090                                                                    
                                                                               
 SENATOR ELLIS moved that HB 234 pass out of committee with                    
 individual recommendations.  Hearing no objection, it was so                  
 ordered.