In recent months, much ink has been spilled and ire raised about the Alaska Permanent Fund Corp.’s Board of Trustees opting to open a satellite office in Anchorage. Those in favor of the plan, including the trustees themselves, say an Anchorage office will help the corporation attract financial talent unwilling to live in Juneau. Those opposed say the office is an unnecessary expense and fear “capital creep,” the drift of state functions — and political power — from Southeast to Southcentral Alaska.
Alaskans are understandably focused on the minutiae of Permanent Fund Corp. dealings, as the corporation manages the state’s signature sovereign wealth fund. In past years, the primary impact its management had on everyday Alaskans was the annual Permanent Fund dividend check (which remains a focal point for many). But these days, the Permanent Fund provides for not only the yearly dividend payout but also the single largest source of funds for state government services, outstripping the oil tax revenues that formerly made up the bulk of state funds.
So who’s right? It’s clarifying to consider the purpose of the corporation. Given that the Permanent Fund has become (and, we hope, will continue to be, if the Legislature can maintain more fiscal discipline than its members have managed so far) the most important and sustaining source of funds for the services Alaskans have come to expect, its guiding light should always be singular: to provide the greatest return on investment for all of us who are lucky enough to call Alaska home. That’s why the corporation’s in-state investment program was a wrongheaded approach (and canceling it was the right move): Elevating political priorities over maximum returns endangers the performance of the fund and thus the fiscal stability of Alaska — and that’s without considering the inherent politics of how those in-state investments are directed. The mandate to focus only on returns rather than political concerns is why a unique and quasi-independent corporation was set up to manage the fund, rather than leave its decisions to politicians.
With that in mind, political concerns about the erosion of Juneau’s clout should take a back seat, and if there are indeed capable financial professionals who would rather live in Anchorage than Juneau, the corporation should enable that possibility. This is 2023; most finance jobs can be performed just as well in one part of the state as another, and if the benefits of a larger population center, major international airport and road access to much of the rest of the state are a draw for financial professionals, then an Anchorage office must be an option.
But given that logic, perhaps the Board of Trustees is setting its sights too low. In a deposition related to former APFC executive director Angela Rodell’s firing, Rodell was asked why she hadn’t favored the trustees’ plan to open a satellite office in Anchorage. Rodell replied that if a second office were a priority, it would make more sense to site it in a financial hub such as New York City, Toronto or London.
Rodell was onto something there: In the era of Zoom and remote work, why not go where the talent already is instead of halfway? It would no doubt be easier to headhunt financial professionals if they didn’t have to relocate — and their ability to drive investment returns could only be helped by being in close contact with decision-makers in the industry rather than decision-makers in politics. If top talent will provide a return for Alaska that far outweighs the cost of their office — and given the size of the Permanent Fund, it’s easy to see how that could be the case — why settle for half measures?