About the SIC
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 client investments, endowments, and reserve funds managed by the SIC are valued at $34 billion. The SIC manages the investments for 23 New Mexico government related clients, which currently have a combined value of $1.5 billion.
The SIC is an institutional investor, receiving public dollars, in the form of royalties and taxes from 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.
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. These assets provide substantial benefits to New Mexico in various ways, most significantly being the more than $1 billion in public school funding and tax savings delivered to New Mexicans every year.
The State Investment Council is chaired by the Governor and includes the State Treasurer; the Commissioner of Public Lands; the Secretary for the New Mexico Department of Finance and Administration; the Chief Financial Officer for a state university; four public members appointed by the Legislative Council; and two public members appointed by the Governor.
The SIC is focused on optimizing the earnings of New Mexico’s permanent funds – funds that contribute to the state’s overall operating budget – while preserving and growing the real value of the funds for future generations of New Mexicans.
What is the SIC?
- The SIC is a professional institutional investment “firm” which manages more than $30 billion in permanent, “rainy-day” and governmental funds for New Mexico.
- Annually, the permanent funds provide a significant portion of the state budget – about 15% historically – and in FY22 will distribute over $1.1 billion to the general fund & beneficiaries.
- On average, these annual benefits save each New Mexico household about $1,300 in taxes every year.
- The permanent funds have grown in value by more than $17 billion over the last ten years, while also distributing more than $8.9 billion to the state during that time.
- As the funds grow, so does the amount they contribute to the state: from $370 million in FY2000, to more than $1.1 billion today.
- Fund investments have earned 8% annually over the past ten years, while the Council has restructured the portfolio to lower long-term fund volatility and reduce investment risk.
- These “sovereign wealth funds” – the third largest in the United States – are a critical resource and a source of pride for New Mexicans.
What is a Sovereign Wealth Fund?
A permanent endowment fund owned by and managed exclusively for a sovereign entity, e.g. a state, and benefiting that state or other specified beneficiaries which:
- is independent from other state financial or political institutions;
- is governed and managed by fiduciaries;
- is generally established from receipts generated by commodity leases, sales, or taxes (typically oil and gas);
- has a long-term investment horizon designed to achieve desired financial objectives;
- invests in diverse asset classes; and
- has as its purpose to provide:
♦ savings (to fund government services and ensure inter-generational equity for its citizens);
♦ budget stabilization;
♦ income (e.g. university endowments); or
♦ economic development.