The South Dakota Investment Council (SDIC) is an important state agency that manages and invests funds for the state government and people of South Dakota. The SDIC oversees billions of dollars in assets across various funds, including the South Dakota Retirement System and school endowments. The investment council has a critical responsibility to generate strong long-term returns on these funds while balancing risk. This article will provide key information and conclusions on the SDIC’s structure, investment approach, performance and impact for South Dakotans.
SDIC’s organization and leadership reflects its professional investment focus
The SDIC has a robust organizational structure to carry out its mission. It is overseen by the State Investment Council, which provides general direction and oversight. The Investment Council consists of 8 members appointed by the Governor. There is also an Executive Director who manages day-to-day operations and an experienced investment staff. The SDIC utilizes the services of professional money managers to invest the funds under its management. With assets exceeding $18 billion, the SDIC has sufficient scale to attract specialized talent both internally and through its partnerships.
The SDIC follows a prudent, diversified investment strategy tailored to long-term goals
The investment council does not engage in risky financial speculation. Its approach is tailored to the unique needs of the funds based on factors like time horizon, income requirements, and risk preferences. For example, the pension fund requires consistent long-term growth to meet future obligations, while the school endowments need steady income to support current budgets. Across its funds, the SDIC utilizes a balanced mix of assets like global public stocks, bonds, real estate and alternatives. This prudent diversification smooths volatility while generating reasonable returns.
Strong performance allows the SDIC to meet critical financial obligations for South Dakota
The investment council has a long track record of investment success, with 10-year annualized returns exceeding 7% as of 2021. This positions the pension fund and other holdings to meet long-term requirements. For example, the pension fund was over 100% funded on an actuarial basis, providing retirement security for tens of thousands of public employees. The investment results also help fund essential services like education through growing endowment distributions. South Dakotans can have confidence that the SDIC is a capable, professional steward of the state’s financial resources.
The South Dakota Investment Council utilizes skilled investment professionals and prudent strategy to manage billions in state assets, generating returns that allow the pension fund, endowments and other holdings to meet their obligations and fund critical public services.