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Investment Fund Structure
The
Investment Office fuctions as a large investment
management firm. The assets of the Land Grant Permanent Fund, the
Severance Tax Permanent Fund, the Tobacco Settlement
Permanent Fund, the Water Trust Permanent Fund and 19 other state agency clients, are allocated among
six operating investment pools. All client agencies are
allowed to adjust their asset allocations on an annual
basis as desired, and all of the investment funds are
available to all of the clients. This policy allows the
clients to diversify their assets appropriately.
Distributions
Over
the last two decades, the Funds have distributed more than
$8.5 billion. On average, these annual distributions
have accounted for nearly
15% of the State's total yearly operating budget. If the
Permanent Funds did not exist, maintaining current
levels of government services would cost an average of
$1,000 to every household in the state.
With New Mexicans
voting to pass Constitutional Amendment 2 in
2003, distributions from the Land Grant Permanent Fund
were raised to 5.0% of the most recent five-year average
market values for the Fund. Voters also approved a
temporary additional distribution through 2017, which
translates thusly:
2005-2012:
Distributions will be 5.8% of the LGPF rolling average
2013-2017:
Distributions will be 5.5% of the LGPF rolling average
Distribution rates for the Severance Tax Permanent Fund
remain at 4.7% of the 5-year average market value.
It is currently
estimated that the two Funds together will be
distributing over a billion dollars per year in Fiscal
Year 2024.
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