Permanent Fund board picks new executive director

Deven Mitchell is slated to be the new executive director of the Alaska Permanent Fund Corp., and thus the state’s $72.2 billion savings account, following interviews of the top three finalists by the Board of Trustees during an all-day meeting Monday in Juneau.

Mitchell, an Alaska state employee for three decades who was appointed acting commissioner of the Department of Revenue last month, has by far the most state experience of the finalists. But the trustees engaged in an extended executive session, lasting three hours instead of the scheduled one, before unanimously voting for Mitchell.

“He was the candidate who most impressed the board,” said Ethan Schutt, the board’s chair, in an interview immediately after the vote. He said the day’s interviews were an important element of the decision, but noted the full selection process extending back to last month was also a significant factor in what proved a tough decision.

Schutt said it’s not appropriate to publicly discuss specific factors that made Mitchell the preferred choice, and if the lengthy executive session involved one or both of the other finalists. But when asked if Mitchell’s role as acting commissioner — which by default made him a fellow member of the APFC’s trustees — played a role, Schutt emphasized Mitchell applied for the job weeks before his appointment to head the revenue department.

Mitchell will replace Angela Rodell, who was fired by the trustees in December for what she claimed were political motivations involving Gov. Mike Dunleavy. An investigative report presented to trustees last week found the governor did not influence the decision, which resulted from “a series of circumstances…(that) resulted in a majority of trustees losing confidence in the executive director’s leadership.”

The starting date and salary for Mitchell will be determined through negotiations with trustees.

The finalists were selected from about 100 applicants following two screening interviews in September with an APFC hiring committee before Monday’s interviews. The APFC’s current acting director, Valerie Mertz, was not among the finalists interviewed.

The other finalists interviewed Monday were:

– Morgan Neff, a longtime Texas investment executive who’s been the chief investment officer of the Alaska Industrial Development and Export Authority since February of 2021.

– Melanie Hardin, a longtime executive with finance companies and current financial innovation principal for Verizon in Los Angeles since October 2020.

APFC’s recent controversy with Rodell wasn’t directly mentioned by trustees during the interviews, but all three finalists were asked how they handled an “incongruent instruction” in a previous job and how they’d handle one from the trustees that conflicted with the Permanent Fund’s management goals.

Neff said that while differences of opinion can exist “at the end of the day we should be able to sit in front of one another, and debate and disagree…I think that actually makes a healthy organization.”

Hardin, while answering the question about previous instances, referred to a “dumb example” from a previous job. Mitchell, as with some other questions, drew upon his longtime state experience by referring to a clash with a previous governor about investing rules for a specific state fund and how “it really is an educational process that logic has to prevail at the end of the day.”

As for getting such an instruction from the board, Mitchell said that unless it was so egregious he felt the need to quit “at the end of the day the board is the boss” and he would implement its decision as directed.

Similarly, all the candidates were asked about recent difficulties retaining and attracting APFC employees. Hardin differed somewhat from the other finalists by stating “the answer is not money…I’m not a big believer in giving everybody raises,” while the other two mentioned high pay (partially via incentives) as part of the lure. But the trio agreed the key beyond salary for employees is a working environment where they feel their contributions and feedback to leaders matters.

All three candidates sought to affirm their affection for and/or ties to Alaska, in addition to emphasizing different aspects of their backgrounds, in their opening remarks to the trustees.

Neff noted four generations of his family have worked in Alaska, despite having just moved here himself last year from Texas, including his father who worked in Haines on the Disney production of the film “White Fang.”

“I feel like my return to Alaska is kind of a promise to him and my family to come here,” he said.

Highlighted among Neff’s professional achievements was his management of $2 billion of investments during the financial crisis beginning in 2008, which he said taught him skills vital for today’s ongoing volatility.

“That taught me three things: remain disciplined, communicate and be transparent, and stress facts over opinions,” he said. That approach meant his company’s 5,000 investors “suffered very little asset attrition during that time, (and) were able to stick it out and return” to previous profitability when the market rebounded.

As for coming to Alaska and then applying to head the Permanent Fund, “right around the time of COVID I was looking for more of an opportunity to do my passion rather than my paycheck and Alaska came calling,” Neff said.

Mitchell had a clear familiarity advantage about APFC matters, as both a career state employee with 30 years of experience and just-appointed member of the trustees, but among the three finalists seemed to struggle the most with the question of why he wants to be in charge of the Permanent Fund.

“I think I’ve kind of struggled in some of my interviews to this on why APFC,” he told the trustees. He said, upon reflection, his motivation is a new ”willingness to take on more risk…I think maybe it’s better said I’m at a point in my career I’m willing to pivot and do something different,” he said.

That is reflected by accepting the acting commissioner’s job, which years ago he might have refused since “my job has been based on being apolitical, and being able to straddle or avoid the political side, and just be honest and provide good policy.”

Hardin, while acknowledging her affection for Alaska is recent after growing up in the Rustbelt, spent her much of five-minute opening statement reciting her resume, with occasional abrupt interjections such as promising to soon stop “boring you” that kept occurring while answering questions. But when asked why she wants the job talked about the Permanent Fund has “a mission not just to make money,” and how as the only minimum-income guarantee for the public among investment finds “the gap between rich and poor is a very important issue in world and this helps with that.”

All three candidates, when asked their plan for their first 100 days, responded with some variation of a “listen and learn” approach, generally suggesting they’d spend the first half of that time doing more listening and the latter half forming a plan for any necessary operational improvements. Neff touched on the widest range of stakeholders he contact, which extended to state lawmakers, while Hardin talked first about meeting with employees and Mitchell talked first about first “sitting down and spending quality time with trustees.”

The candidates also voiced similar thoughts about being involved with the Permanent Fund’s investment strategies, stating that’s the role of the APFC’s chief investment officer (but the executive director should monitor activity and offer advice when requested). They revealed some differences in their thoughts about investment strategy — and perhaps their politics — when asked about specifics such as trying to achieve a fund objective of earning 5% more than the annual Consumer Price Index.

Hardin, while asserting the market is suffering a hangover due to unusual circumstances, stated “the question is what is the Fed going to do — how long is the Fed going to keep their foot on the neck of the economy?” Neff also noted the unusual circumstances, but “next year at this time could be quite different” and suggested examining inefficiencies in current strategies, fees being paid to investment managers and “looking for areas where we can improve custodial relationships.” Mitchell advised caution, stating ten-year views are a poor basis for “an inter-generational investment,” and current concerns are “not cause for a change of course at this point in time.”

• Contact Mark Sabbatini at mark.sabbatini@juneauempire.com