Anchorage's $725.7 million cash pool earned $4.4 million last quarter, report shows

Anchorage's $725.7 million cash pool, where the city and school district park money until they need it, earned $4.4 million from April through June, according to a quarterly report scheduled to go before the Anchorage Assembly on Tuesday, Oct. 20.

The Municipal Cash Pool holds most of the city's short-term cash. The municipality owns about 75% of it, the Anchorage School District about 24% and the Anchorage Community Development Authority less than 1%.

The pool's size swings mostly with money coming in and going out, not with investment results. It began the year at $744.2 million and fell to $552.6 million by March 31. In the second quarter, the quarterly performance report from investment advisor RVK shows $168.7 million in net inflows and $4.4 million in gains, a 0.83% return after fees.

The money is split among three outside managers, each with a different job. Alaska Permanent Capital Management runs the Working Capital Portfolio, meant for same-day cash needs, with $292 million. BlackRock runs the Strategic Reserve Portfolio, which holds cash the city does not expect to use over the next three years, with about $279.7 million. PNC runs the Contingency Reserve Portfolio, a buffer between the other two, with about $154 million. In May, $40 million was moved from the contingency reserve to working capital.

Mayor Suzanne LaFrance's memo says all three managers beat their benchmarks over one, three, five, seven and 10 years before fees. After fees, RVK's report shows BlackRock's three-year return trailing its benchmark by 0.01 percentage point.

Fees run about $1 million a year, or 0.14% of assets.