In deciding that $200 million of the Alaska Permanent Fund would be in “Alaska-based investments,” the fund managers have taken a flexible approach to defining what constitutes Alaska based.

The fund managers, especially McKinley Capital Management, have made several investments that resemble those that would be made by venture capitalists, which come with high risk.

The fund’s description of the in-state investment program does not say that high-risk investments are a focus of the program. It simply says the investments have to be of similar risk to investments outside Alaska, which conceals more than it reveals.

For instance, one of the Outside companies McKinley Capital Management has invested unknown millions into is SpinLaunch, a speculative investment for a public fund.

SpinLaunch, a startup headquartered in California, is trying to get to space without using traditional rockets. Its plan is to use a giant vacuum-sealed centrifuge that will spin a rocket at enormous speeds and hurl it into space at 5,000 mph.

SpinLaunch is mainly backed by venture capital companies, including Kleiner Perkins, Airbus Ventures, Google Ventures, Lauder Partners and others. CNBC reported last fall that the company has so far raised $110 million.

The level of risk acceptable for private venture capital funds is higher than it is for a fund owned by the public, but perhaps that is part of the logic in the decision by the Alaska Permanent Fund to keep its in-state investments secret, allowing the companies that receive money to decide if anything should be revealed to the public.

The Alaska connection that McKinley Capital Management cites as a reason for this investment is that sites in the Aleutians, including Ugadada Bay, are under review as home for potential launch facilities. SpinLaunch says it will soon select a site “in a coastal region of the United States.”

In 2018, SpinLaunch was looking at basing its catapult-like system in Hawaii. “The company wants the state of Hawaii to help it by issuing $25 million in special purpose revenue bonds—bonds sold to private investors—for which the state incurs no liability but charges no taxes on their interest,” Honolulu Civil Beat reported.

The plan met with local opposition on the Big Island. For its test launches the company is using Spaceport New Mexico, a state-owned 18,000-acre range.

In October, the company launched a 10-foot projectile from the prototype launcher pictured below, saying it went up “tens of thousands of feet.”

McKinley Capital, borrowing verbiage that could have been written by the SpinLaunch PR team, says the company is “poised to disrupt the launch industry through the development of a weather independent, low-cost, and high-cadence hypersonic launch platform. The current plans focused on remote Alaska islands could catalyze hundreds of millions of investment in Alaska communities.”

Will SpinLaunch succeed? No one knows yet.

For a particularly harsh assessment of the idea, check out two videos by a British chemist named Philip Mason, who calls himself Thunderf00t on YouTube. These videos have had hundreds of thousands of views and while he does not have inside information about the company, his analysis raises excellent questions about the physics of the SpinLaunch idea.

If he is right, SpinLaunch is never going to fly.