"To protect and grow the state's permanent endowment funds for current and future generations, through prudent, professional investment management."

This is the mission of the State Investment Council, and part of an overall Mission Vision Values statement developed by SIC staff in 2011. 

This statement helps describe our values and goals as we strive to become one of the most highly respected global sovereign wealth funds.

New Mexico is very proud of the fact that we have one of the largest sovereign wealth funds (permanent endowments) in the United States ($16B+) and one of the 30 largest in the world. Thanks to the far-sighted planning of our legislature in 1958, the SIC annually contributes on average, 10%-15% of our state's operating budget - saving each NM family about $1,000 in taxes each year.  With improving investment performance and our annual receipts from natural resource and land-grant related revenues, we will be able to consistently increase our annual contributions to the state budget and to the beneficiaries of the other funds we manage.

By investing prudently over time, we will enable future generations to enjoy the same or a greater level of benefits compared to what we currently provide to our citizens.  In 2012, despite significant and ongoing efforts to restructure Permanent Fund investments, the Council grew its assets by more than $1.9 billion dollars, while achieving investment returns of more than 14%.

The Council also approved new investment strategies that once fully implemented, will increase income producing real assets, which will help reduce overall volatility of the portfolio.

In addition to our Land Grant and Severance Tax Permanent Funds, and the Water Trust Fund and Tobacco Settlement Fund, we currently manage investments for 17 other governmental entities.

I am honored to have the opportunity to serve the SIC and our citizens in coordinating the operations of the State Investment Office. Over the past two years, the SIC has implemented numerous changes, some of which include the following: 

•       Ranked #2 nationally among our peers with assets exceeding $1B for our investment performance through the first three quarters of 2012;

•       Distributed more than $2 billion to state beneficiaries and the general fund between April 2010 and December 2012; 

•       Adopted fundamental investment philosophies and beliefs, and began to re-align staff to reduce internal and increase outsourced investment management, with prudent monitoring;

•       Revised our asset allocation model, and our annual performance target. We are implementing strategies to ensure appropriate diversification and improved long-term performance, hedging against volatility and utilizing strategies designed to reduce risk;

•       Established investment, audit, and governance committees, thus improving governance;

•       Re-structured the Council and the staff to comply with statutory changes in 2010 & 2011, and to adopt best practices recommended by the 2010 independent fiduciary review conducted by Ennis Knupp;

•       Adopted 14 new policies, including a Code of Ethics and a Code of Conduct, with 10 others under consideration;

•       Completed a human resources organizational analysis, resulting in critical re-alignments;

•       Conducted a successful national search for our Deputy, and hired a new General Counsel and Chief Financial Officer;

•       Terminated more than a dozen external investment managers, generally for under-performance, while hiring 17 new managers and consultants with additional RFP's in progress;

•       Achieved some significant settlements ($170M as of 12/31/12), and are actively pursuing legal recoveries for pay-to-play related damages and investment losses related to matters which pre-date this Council's oversight;

•       Cooperated fully with federal & state authorities in pending related investigations;

•       Initiated new legislation, which resulted in 4 new laws or statutory improvements;

•       Pursuing legislation in 2013 to further enhance operations.

•       Published in-depth report concerning former use of placement agents and related investment manager matters; and

•       Initiated a strategic planning process, with further reforms being considered.

Our Council and each member of our staff is committed to fulfilling our fiduciary responsibilities in a professional, ethical, and respectable manner. We strive to merit the trust of our stakeholders. Thank you for your interest in & support of our efforts.

Steven K. Moise
State Investment Officer
January 2013