Private Investments

ATRF continues to build its private equity portfolio toward its long-term target allocation of 5% of the fund’s assets. Additional investments were made during the year with three existing general partners covering a variety of geographic areas and asset types. Over the past year, ATRF developed and began implementation of a comprehensive, long-term term strategy for private equity investment. Full implementation of this strategy will allow the fund to grow the portfolio to its target allocation over the next several years from the current 1% level.

ATRF’s private equity program has been in existence for only two years, and investments represent a very small proportion of total assets. Private equity investments are typically very illiquid and have no quoted prices for assets. Values are typically established at the time of sale or appraisal, which may not occur for a number of years after the initial investment is made. Until ATRF’s private equity portfolio matures over the next several years, rates of return will effectively reflect the initial investment, less management fees. During this time period the benchmark will be set to equal the calculated return on the portfolio. In the past year, our private equity investments returned 3.0%, the result of income and valuation adjustments.