Mar. 16, 2022
Vanessa A. Countryman Secretary U.S. Securities and Exchange Commission 100 F Street NE Washington, DC 20549-1090 Ms. Countryman – I am the Chief Investment Officer of the ~$80 billion Alaska Permanent Fund Corporation (APFC). APFC is a state sovereign wealth fund that today funds both a majority of the State of Alaska’s operating budget and the only broad-based universal basic income program in the united states through its annual dividend to state residents. As the CIO of a large pool of capital that has public stocks as its largest asset class, I have grown increasingly concerned about the lack of shareholder oversight of publicly-traded companies that has grown along with the overall growth of passive / index investing. APFC has maintained the vast majority of public equity investments with active managers because we don’t believe that the large index investing firms are adequately focused on driving shareholder value at their investee companies. Because of this orientation I was disappointed to see two proposed rules emerge from the SEC that would hamper active managers from engaging in constructive (or activist) approaches with publicly traded companies. I believe that our active managers develop valuable proprietary IP when they do the work on a potential large position and I believe that APFC as a client of these managers has a stake in that work product. By requiring managers to disclose those positions pre-maturely (either through a shorter timeframe for 13D disclosure or disclosure at a certain dollar value threshold) the SEC would be simply giving entrenched management teams an advantage to resist constructive measures from engaged shareholders. I believe that this is harmful to the stakeholders of the APFC who are making an investment in the manager fees of active managers while many of our peers may be simply indexing. Encouraging active engagement with public companies by well resourced active managers is not only in the interest of the APFC but it is in everyone’s interest who has any investment in the public markets. Rules like these proposed rules, I believe, will on the margin encourage less active management of equities and less constructive engagement with entrenched management teams. Even pure passive investors should care that acceleration of the this trend will make US markets less dynamic and US companies less competitive globally. For the avoidance of doubt, these comments refer to Notice of Proposed Rulemaking on the Prohibition Against Fraud, Manipulation, or Deception in Connection with Security-Based Swaps; Prohibition Against Undue Influence over Chief Compliance Officers; Position Reporting of Large Security-Based Swap Positions (or “10B-1 proposal”) (File No. S7-32-10) and Notice of Proposed Rulemaking on the Modernization of Beneficial Ownership Reporting (File No. S7-06-22) Thank your for considering my comments. Best regards, Marcus Frampton ___________________________________________ Marcus Frampton | Chief Investment Officer Alaska Permanent Fund Corporation 801 West 10th Street Juneau, AK 99801