AIDEA waives size and age rules for firms bidding to invest $25 million of its money

Alaska's state development authority will let smaller and newer firms compete to invest about $25 million of its money, waiving a rule in its own investment policy that managers have at least $1 billion under management and three years in business.

The Alaska Industrial Development and Export Authority told bidders Tuesday, 10 days before proposals are due Nov. 20, according to Addendum No. 4. Every other requirement stays.

AIDEA plans to announce its picks Dec. 4, three days before Gov. Mike Dunleavy, who is term-limited, leaves office, and to sign contracts Dec. 16, after a new governor is sworn in.

AIDEA staff made the call weeks earlier. The agency's internal investment committee, made up of AIDEA employees appointed by Executive Director Randy Ruaro, voted to waive the rule Oct. 9. The request for proposals that went out Oct. 29 still listed it as a minimum qualification. A committee memo to Ruaro cited "the lack of firms that would be able to meet the requirement" and AIDEA's "unique investment needs."

The policy, adopted by AIDEA's board in April, lets the committee waive manager requirements by majority vote "to accommodate the circumstances specific to a potential Investment Manager," and document why for the executive director. It doesn't require a board vote. The waiver applies to all bidders and came before any proposals arrived. Ruaro makes the final pick. AIDEA used the same April policy last month to put $25 million into a nuclear startup, a deal that wasn't on the board's agenda.

The new managers would invest in bonds and aim to beat a common bond index, with what AIDEA calls "a higher risk/return dynamic." AIDEA set no specific limit on high-yield bonds, riskier debt that pays more because the borrower is considered more likely to default, as long as the mix makes sense for risk and return, according to Addendum No. 3.

AIDEA says it wants to diversify its investments "based on an excess of cash savings, and a renewed desire to bring on outside investment managers." Qualified Alaska firms get a 10% edge in scoring. The $25 million is a starting amount to be shared among the managers it picks, and AIDEA may increase it.