SovereignWealthFunds.comAlabama Trust Fund
Alabama Trust Fund: what it invests in
Geography Global
Alabama Trust Fund: how big it is, and on what basis
In US dollars: about USD 4.19B. Reported in US dollars.
Return FY2025 10.80%
Alabama Trust Fund: what it publishes
Published 8 · Partly 1 · Not published 1
Our 10 item score. It measures what is public, not how well a fund is run.
At a glance. The Alabama Trust Fund is the state's permanent fund for offshore gas money, created by voters in 1985 after the Mobile Bay gas discovery. A board chaired by the Governor invests it through external managers in stocks, bonds, real estate and hedge funds. The portfolio was worth USD 4.19 billion at 30 September 2025 and returned 10.80 percent that year. S1 S3
Key points
- Portfolio grew USD 246 million, or 6.23 percent, in fiscal 2025. S1
- Eight-year average return of 8.38 percent, including 21.57 percent in 2024. S1
- Pays out 33 percent of gas capital payments plus 5 percent of the three-year average market value each year. S1
- Distributed USD 180.4 million in fiscal 2025 to local capital funds, Forever Wild, senior services and the General Fund. S1
- Royalty inflows fell from USD 46.4 million in 2023 to USD 27.8 million in 2025. S1
- Callan LLC is the investment consultant; all managers are external. S4 S3
Interesting facts
Mandate and goals
Under the state constitution the ATF captures money from offshore drilling rights and gas royalties, keeps the principal invested permanently and makes distributions fixed by constitutional amendment. S1 S3
How it invests
| Industries | . Sector agnostic S1 |
|---|---|
| Asset classes | Public equities, Fixed income, Real estate, Hedge funds and absolute return S1 |
| Stages | Public markets, Real estate S1 |
| Geography | Global. US and international markets S1 |
| Direct / through funds / co-invest | No / Yes / No S3 |
| Managed in house | 0 percent S3 |
| Ticket size | No ticket size; assets are held through external mandates. S1 |
| External managers | External managers named in quarterly board minutes; Callan LLC reports performance S4 |
| Co-investment programme | No co-investment programme. S1 |
Asset mix: International equity 26%, US large cap equity 25%, US fixed income 23%, Real estate 8%, US small cap equity 6%, Multi-asset 6%, Hedge funds 6% (as of 2025-09-30) S1
Past investments
| Year | Investment | Type | Sector | Amount |
|---|---|---|---|---|
| 2001 | Transfer from the Alabama Heritage Trust Fund. All trust capital of the 1982 predecessor fund moved into the ATF. S3 | State asset transfer | Financial services | USD 467.0M |
| 2002 | Education Trust Fund Rainy Day Account. Balance sheet account created inside the ATF by Amendment 709. S3 | State asset transfer | Financial services | USD 248M |
Case studies
From Mobile Bay gas to a permanent fund S3
- What: Voters created a permanent trust for offshore gas revenue after the state sold drilling rights.
- When: 1985
- Size: Initial corpus USD 333.6M
- Why: To keep a one-off resource windfall working for future residents rather than spending it.
- Outcome: Grew to USD 4.19B by 2025.
A market-based payout rule S1
- What: Amendment 856 set distributions at 33 percent of capital payments plus 5 percent of the three-year average value.
- When: Current rule
- Size: USD 180.4M paid in FY2025
- Why: Ties spending to fund size and smooths it across market swings.
Investment process
A nine-member board chaired by the Governor sets the investment policy statement, picks external managers and oversees reporting. Callan LLC presents performance each quarter, and the State Treasurer's office administers the fund. S1 S4 S3
| Committee | Role |
|---|---|
| Board of Trustees | Investment policy, manager selection and reporting S1 |
- The board adopts the investment policy statement and target allocation. S2
- The consultant reviews managers and performance quarterly. S4
- The board hires or replaces external managers. S3
How to approach: Managers can follow board meetings and policy documents on the Treasury page; selection runs through the board and its consultant. S2
Size and returns
- Headline size: USD 4.19B (Fund market value, as of 2025-09-30) S1
- In US dollars: about USD 4.19B. Reported in US dollars.
- Total trust assets incl. Forever Wild land: USD 4.5B (Total assets (balance sheet), as of 2025-09-30) S1
- Return, FY2025: 10.8 percent S1
- Return, FY2018 to FY2025: 8.38 percent a year (simple average of annual returns) S1
- Size over time (USD billion): FY2024 3.94, FY2025 4.19 S1
Leadership
Governance and transparency
- Legal basis: Amendment 450 (1985), with later amendments including 543, 666, 803 and 856 S1 S3
- Oversight: Board of trustees; administered by the Office of the State Treasurer S1
- Auditor: Audit reports published on the Treasury page S2
- Publishes an investment policy statement, quarterly statements and minutes. S2
Transparency score: 8.5 of 10 (band 5 of 5). Our own 10-item rubric; see the methodology page.
History
| Date | Event |
|---|---|
| 1978 | Natural gas found in Mobile Bay. S3 |
| 1982 | Alabama Heritage Trust Fund created. S3 |
| 1985 | Voters approve Amendment 450 creating the ATF. S3 |
| 1992 | Forever Wild Land Trust established. S3 |
| 2001-12 | Heritage Trust capital moved into the ATF. S3 |
| 2008-11-04 | Amendment 803 sets up rainy day accounts. S3 |
| 2025-09-30 | Portfolio reaches USD 4.19B. S1 |
For family offices
The ATF invests only through external managers and has no co-investment route; managers reach it through the board and consultant. S3 S4
Reports
- ATF Annual Report 2025: https://treasury.alabama.gov/wp-content/uploads/2026/02/2025-ATF-Report.pdf S1
Common questions
How big is the Alabama Trust Fund?
USD 4.19 billion of invested assets at 30 September 2025. S1
How did it perform?
10.80 percent in fiscal 2025 and an 8.38 percent eight-year average. S1
Who chairs it?
Governor Kay Ivey chairs the board. S1
Where does the money go?
To county and city capital funds, Forever Wild, senior services and the State General Fund. S1
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All sovereign wealth funds in North America · All sub-national permanent funds · All funds in United States
Sources
Disclaimer
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