Next week, the Alaskan government is expected to give each of its citizens a check—typically for around $2,000.

The “dividend” is one of the benefits of living in the state that houses America’s biggest sovereign wealth fund, the Alaska Permanent Fund. Dubbed by some an “amazing true socialist miracle” in one of the reddest US states, it’s often held up as a precursor to Universal Basic Income. Hillary Clinton toyed with proposing an expansion of the model across the country named “Alaska for America,” and California’s governor has talked of handing out a “data dividend.”

Like many SWFs, Alaska’s fund was founded to make sure its oil reserves will benefit the state’s people long after the oil runs out. It snaffles up 25% of all state oil proceeds every year, with total assets now at $60.4 billion—around $80,000 for each Alaskan.

In January, we spoke to CEO Angela Rodell about the fund, its horizon, and how the changing global economy impacts its investments. The interview has been edited for length and clarity.

How do you think the global economy is going to look like in 20, 30, 40 years, and what do you feel you need to be investing in for the fund to be in the best possible shape for the Alaskan people then?

The global economy is probably going to look how many of us expected it to, which is greater reliance on technology, a greater reliance on artificial intelligence and not as labor intensive in the same way that we traditionally think about about the economy. The economy’s going to be huge. I mean we talk about how large the economy is today and there’s nothing impeding that global growth in terms of population, demographics, all of that and we can see it in Africa, Southeast Asia—just the growth in population, young people.

When we look at the traditional markets such as the United States, or Europe, or Japan, those economies that are probably going to be significantly smaller potentially than they are today, but just as impactful in terms of intellectual property.

About 60% of your funds are invested in the US. Given your longterm view, do you feel a need to slowly diversify to other regions?

Yeah, we do…We definitely want to have exposure to the developed world, whether it’s Japan or it’s Europe or other countries like that, but we also recognize that there’s a real need to have a tilt. We’ve had a tactical tilt towards emerging markets and we’ve developed about a year ago a partnership to invest in the Middle East, South Asia and Africa.

Are there particular areas in emerging markets where you see growth— either in terms of countries or sectors that particularly excite you?

[In] infrastructure and energy, things like clean water in Africa and Southeast Asia, we expect technology to leapfrog over everything in the developed world and be really innovative. It’s a place where innovation can be welcomed because there’s no infrastructure in place that you’re having to upgrade or replace. You’re just coming in fresh and can really make a difference in those places.

Can you point me to examples where you’ve invested in a particular technology with the aim of that then being used for “technology transfer” in Alaska?

We’ve looked at a lot of alternative energy projects. We’ve invested in a number of those spaces through our infrastructure and private equity asset allocations and I think there’s some really interesting things being done in that space—in alternative energy and battery storage. I don’t think any of them are ready yet for prime time to come back to Alaska…[but] when we think about 10 years, 20 years, 30 years, there’s no question that, that technology will be ripe to come back to the state and really benefit this state.

People in the renewables space tell me they’re seeing interest in investment from sovereign wealth funds, but it’s quite slow and cumbersome—they feel like SWFs are five years behind where the planet needs them to be. Do you think that’s a fair description? What will it take for funds to really ramp up their investments?

I think the challenge on renewables in particular is that there’s a potential for scalability, but in developed markets, you have a whole grid system and infrastructure that was built around a different type of technology and how are renewables going to get into that space to then provide an alternative? As investors we have to be mindful of the risks we’re taking—how much we can do in each space, and how much our allocations are to those spaces and, quite honestly, the obligations we may have a to maintain some safety of principle future generations. So, I think money is getting into those spaces. I think the costs are really high and the return metrics just aren’t there yet on some of them.

You’ve been divesting from fossil fuels. What’s driven those divestments and do you plan to get out of them entirely?

No, I think to be fair we haven’t divested. I mean, I guess I just want to make it clear that divestment implies an action that we’ve taken, and it’s not an action we’ve taken, and we’ve not instructed any of our managers to divest of fossil fuels. When we look at fossil fuels, for us it’s more about opportunity, longterm opportunity where you think those dollars are best spent. Fossil fuels are going to continue to have a very important role in the world’s economy over the next 20, 30 years.

The fact of the matter is that much of the world’s population and economic wealth still depends on traditional energy sources, whether it’s natural gas, whether it’s oil…So we’ve reduced our exposure to them but we’re not divesting.

Ok. And do you expect your exposure to stay comparatively lower?

I do expect it to say comparatively lower because I think what we, as long-term investors, look at opportunities and where growth is coming, the compelling stories are away from fossil fuels right now.

On emerging markets, is India a crucial destination when investing in the longterm?

Absolutely, absolutely. I think India is a really interesting place looking forward. I think the growth potential, what they want to do in that country, is very intriguing. It’s—arguably—it’s a democratic country. Rule of law is important. So there are just a lot of things going on within that country—and huge growth. Their population under the age of 20 is ginormous. They are going to be the wave of the future.

On tech, do you feel there’s too much competition for VC investments at the moment?

I never think that there’s too much competition. I think when you have all these dollars flowing into that sector, you can run the risk of making some really poor investments because there’s so much demand for investments…but from my point of view, I don’t think there’s too much demand.

I think biotech continues to be really intriguing. I think the innovation that is happening across medicine is really interesting. I think there’s going to be a tremendous amount of disruption…whether it’s biotech and genetics and how we interface with disease, or just the delivery of services, the cost of services, the nuts and bolts of how we procure medical services as a consumer.

Do you think private equity is over-valued in general at the moment?

We’re seeing that across across spaces. Public-market valuations have been high; it’s natural that you would expect, [when] public equity has been high, private equity will be high as well. I think you see it in the bidding up that happens at the limited-partner level to get into some of these investments.

Maybe now is an opportunity to sell some of those that you feel no longer can no longer contribute to your portfolio in the same way they may have in the past—take some gains off the table and then give yourself some dry powder to make future commitments and see where that goes.

More generally, how is the current political and economic turbulence shaping your outlook and activity?

I think the volatility we’ve had in the market the last few months has been good for the market. I mean because there’s more of a buyer-seller interaction going on, so I think for our active managers, there’s more opportunity to demonstrate value in longterm growth for the fund. I think we can get caught up in the daily minute by minute twitter feeds of what’s going on, especially here in the US. But we’ve known the market needed to take a deep breath. We’re at the top of a 10-year bull run, and so I don’t think any of us were surprised by the volatility or the downturn. And the economy still seems to have some underlying strengths, so that bodes well.

The market’s going to go down. It’s an opportunity to buy and, in part, it’s an opportunity to lean in and find those things that we thought were overvalued or too expensive to get into in the past. I don’t know what they are today, but there’s always an opportunity when markets come down.

And how is the volatility in geopolitics affecting the way you guys work?

It raises flags for us, definitely. It raises flags about our ability to get into some of the places that we wanted to get into. Like for example, if you want to expand into India, into China, into Africa, into some of these places, there can be geopolitical concerns, trade noise, things that make you do a different risk assessment than you might’ve done a year or two ago.

Does America’s turbulent politics make you think you should be less exposed here in the medium-term?

We’re just not used to it here in the US. We’re used to our politics being pretty steady-eddy, and so I think the challenge for us is to look at it and go, “This is more the norm for other parts of the world.” It’s a whole new thing for the US. But, ultimately, if you believe in the rule of US law, which I do…the US continues to be a really great place to invest. We have really innovative academic institutions. We still create an atmosphere or breeding ground for innovation in this country. It might not be what it was 10 years ago, but then nothing is what it was 10 years ago. Learning, figuring out how to adapt to this new paradigm, where maybe the US is a little bit more volatile than it’s been in the past, creates really interesting investment opportunities. I think it sparks creativity at grassroots level that opens up avenues to invest in disruption. So, if anything, I think you’d almost want to put more money into the US at this time.

How do current geopolitics make you feel about investing in China?

We feel cautious about investing in China. China continues to present a number of opportunities for longterm investors. It continues to be a huge economy. It has a huge role in the world economy. It’s going to be adopted into the indices. You have to have some exposure to China. I think we’re cautious in the sense, like everybody else, we kind of don’t know what the short term impact of the US-China relationship is going to be…over the next two years. Then, the US will have a presidential election, and then we’ll see where we’re at in 2021, and things will shift again. But if my outlook is five, 10, 15 years, absolutely what we want is to continue to have exposure to China, and try to be very selective in how we engage on that front.

Where do you see the most interesting opportunities in infrastructure as the global economy changes?

I think the biggest opportunities are, quite honestly, in the Arctic. I think climate change presents the world with a number of different opportunities for investment. Cities are going to need to invest in different types of infrastructure to address rising sea levels. Shipping looks different. Ports look different. Sea lanes across the Arctic opening up markets faster [will create] opportunities.

What opportunities do you see in the intersection of technology and infrastructure?

In Europe we’re seeing really sort of interesting thinking and ideas and opportunities on smart cities—out of Germany and Brussels, to some extent….[building] from the ground up and really embedding technology into that.

I think what’s really interesting about Europe is how they’re trying to reinvigorate their cities, and take advantage of this without impacting the historical significance of the places. This is where it’s so hard with existing infrastructure: How do you layer this on? A lot of this is being tested in new suburban developments, for example, so you create a city from scratch as a suburb of Paris or a suburb of Brussels to try and test things out.

And similarly there are e-commerce opportunities springing up?

Yeah, and Europe looks very different on e-commerce compared to the United States. Much less emphasis on bricks and mortar…it’s very different, and their e-commerce numbers are much higher than they are in the United States. So, a lot of opportunity for Amazon.

Is that a sector you see having a lot of potential in emerging markets as well?

The interesting thing in emerging markets and some of these other markets is that people have a very different relationship with money. Whereas you or I in a developed country like the United States or the United Kingdom might be willing to hand a credit card over to somebody else to handle, people in those don’t. They want to hold onto it themselves because they view it as currency, and their relationship with money is very, very different and there’s a sense of barter that can happen.  So, how do we adapt technologies and adapt these things in e-commerce? It may look much more small-business oriented, which means that you have to think about it differently than maybe embedding these big platforms.

What are the big shifts you’re seeing in the real estate market at the moment?

Arguably, the retail sector—those indoor malls from 1985 don’t cut it anymore. They really have to deliver much more of an experience, [be] much more embedded in lifestyle—a place where you might live, work and play outdoor, indoor, and recognize the role of e-commerce. If you think about the malls, or the retail experiences, that do really well today, they tend to be within walking distance from some multifamily real estate, which is also an opportunity, and I think as the population ages in places like Europe and the United States, that becomes even more important.

London and Britain have long been a target for SWF real estate purchases. How doe you see that in the Brexit era?

We have a retail scheme in Bromley [in South London] and a retail scheme in Warrington. We bought Bromley right after the Brexit vote, so we felt really good about that purchase because we had already embedded into the pricing a Brexit effect.

The United Kingdom will continue to be an interesting place to have investments for the long term because I don’t think the United Kingdom is throwing up its borders, shutting down for business and going away. I think it’s just going to be a little different. We don’t know how that’s gonna look and some of that has already been priced in, so we’re just watching directionally where the demand is. For example, there’s a lot of demand for rental housing because there’s not a large multifamily rental housing market, especially in London.

People love looking at the Alaskan dividend and asking if it could be replicated across the US or elsewhere. Would you advocate for that?

The challenge Alaska has with its dividend program is that it’s coming at the expense of other services being provided by the government. What people really need to understand is what they want from their government services , and how they expect those services to be paid for either through taxes or through an endowment.

There’s a tremendous amount of positive effects that come from the dividend, but what we don’t like to talk a lot about is its negative effects—the fact that we see a huge spike in domestic violence incidents. We see a huge spike in alcohol-related incidents or drug-related incidents. The calls to our police and state troopers go up significantly upon receiving the dividend…the absenteeism of people pulling their kids out of school because they were involved in one of these situations and can’t get their kids up in the morning and get them to school. There are definite social ramifications when you provide money, cash, to citizens, that need to be dealt with and have a cost to the state. So you just have to weigh all the positives and benefits, and make sure it’s something that you want for society because it sounds great but it’s a little messy.

Read Angela Rodell on how more women in finance can improve public health—for How We’ll Win

📬 Sign up for the Daily Brief

Our free, fast, and fun briefing on the global economy, delivered every weekday morning.