About the State Investment Council
The New Mexico State Investment Council is a Sovereign Wealth Fund (SWF) that manages investments for New Mexico's four permanent funds and other state assets.
What is the State Investment Council?
The New Mexico State Investment Council (SIC) is a Sovereign Wealth Fund (SWF) that manages the investments for New Mexico's four permanent funds: the Land Grant Permanent Fund, the Severance Tax Permanent Fund, the Tobacco Settlement Permanent Fund, and the Water Trust Fund.
As of 2021, New Mexico's permanent funds, governmental investments, endowments, and reserve funds managed by the SIC are valued at $31 billion. These assets provide substantial benefits to New Mexico in various ways, most significantly being the more than $1 billion in school funding and tax savings the Land Grant and Severance Tax Permanent Funds deliver to New Mexicans every year.
The SIC is an institutional investor, receiving public dollars, in the form of taxes on natural resources and income from sales and leases of public lands and minerals, and those funds are invested on behalf of the people of New Mexico. The surplus created by the state's oil and gas revenues resulted in the creation of the SIC, which was established in 1958.
Fiduciary Responsibility
The SIC is the fiduciary body overseeing the state's permanent funds. A fiduciary is a trustee, bound by legal and ethical responsibility to manage a trust's assets, while acting solely in the best interests of the trust's beneficiaries. The SIC is the "fiduciary" for its client—the State of New Mexico and its citizens.
Its investment model emphasizes a portfolio comprised largely of diversified performance-oriented assets.
Governmental Clients
In addition to the permanent funds, the SIC manages the investments for 23 New Mexico governmental entities, which currently boast a combined value of $1.5 billion. The Council does not charge any fees related to its overhead costs, allowing clients to access high-quality investment managers at the same lower institutional rates commanded by the Council's $31 billion in assets.
New Mexico has the third-largest sovereign wealth fund in the United States ($31 billion) and ranks 31st largest in the world.
The SIC's annual contributions to the State make up, on average, 15% of New Mexico's operating budget—saving each New Mexico family more than $1,270 in taxes each year.
History of the SIC
Key milestones in the State Investment Council's history
SIC Established
The State Investment Council was established to manage New Mexico's natural resource revenues and create a permanent endowment for future generations.
Severance Tax Permanent Fund Created
Constitutional amendment established the Severance Tax Permanent Fund to receive and invest severance taxes from natural resource extraction.
SIC Assumes STPF Management
The SIC was given responsibility for managing the Severance Tax Permanent Fund, with constitutional protection from legislative appropriation.
Council Restructured
The legislature restructured the Council, establishing advisory committees (Investment, Audit, and Governance) to assist in oversight of the funds.
Early Childhood Education Fund
The legislature created a $300 million endowment to support early childhood education in New Mexico, managed by the SIC.
The 11-Member Council
The State Investment Council is composed of 11 members, including Governor Michelle Lujan Grisham (Chair), Land Commissioner Stephanie Garcia Richard (Vice-Chair), and Treasurer Tim Eichenberg. Four members are appointed by the Governor, and four members are appointed by the Legislative Council. Only two legislative appointees can be from any one political party. All public members must be confirmed by the New Mexico State Senate.
Council terms are five years, staggered to ensure board continuity, and members may be reappointed. The Council meets monthly, and all meetings are open to the public and webcast for transparency.