The Permanent Fund wants $215 million to run itself

The Alaska Permanent Fund Corporation wants $215.4 million to run itself next year. About three-quarters of that goes to outside firms that manage the money.

Trustees advanced the request to the governor's budget office on Sept. 2. It is $38.6 million above what the corporation actually spent in the year that just ended, an increase of about 22 percent.

Fees to outside investment managers account for $163 million of it, up $23.2 million from last year's actual spending.

That is not what managing the fund costs. It is what the Legislature appropriates. A large share of the fund's investment fees, particularly in private markets, is deducted directly from returns and never appears in a budget document. The corporation calls these net-of-fee arrangements, and this packet does not say what they add up to. The true cost of running the fund is higher, and the request before lawmakers does not show by how much.

The entire increase in manager fees comes from one place. Alternative markets, meaning private equity and similar holdings, rise to $40 million from $36.3 million. Public equities stay flat at $120 million. Real estate stays flat at $3 million.

The corporation is spending less on its own people. The budget eliminates a vacant business analyst position, dropping authorized staff from 66 to 65, and adds none. Of four current vacancies, recruitment is paused on three, all of them in investments, including a public equity portfolio manager job open since February 2025. The only position being actively recruited is an administrative specialist. The packet does not explain the pause.

Internal costs rise 5.7 percent to $32.8 million. That includes a 5 percent merit and cost-of-living increase, incentive compensation funded in full toward a possible $4.3 million, a $2,000 bump in trustee honoraria, $175,000 to build internal artificial intelligence capability and $260,000 for a cybersecurity audit.

The fund itself had a good year. It closed June 30 at an audited $91.9 billion with a 12.42 percent net return.

The governor's budget goes to the Legislature by Dec. 15. Trustees meet again Sept. 30 in Nome.