Minnesota Finance Board

The Minnesota State Board of Investment (SBI) serves as the investment manager for the state’s retirement funds and other state assets. Its primary mission is to maximize long-term returns while managing risk, ensuring the financial security of Minnesota’s public employees and effectively stewarding state resources.

The SBI manages a diverse portfolio spanning various asset classes, including domestic and international equities, fixed income securities, private equity, real estate, and alternative investments. This diversification strategy aims to mitigate risk and capitalize on opportunities across different market segments. The board operates under a framework of established investment policies and guidelines designed to promote responsible and prudent decision-making.

The board itself is comprised of key state officials: the Governor, State Auditor, State Treasurer, and Attorney General. This structure ensures accountability and transparency in the investment process. The board members are responsible for setting investment policies, overseeing the performance of investment staff and external managers, and ensuring compliance with applicable laws and regulations.

A crucial aspect of the SBI’s work is its engagement with external investment managers. The board carefully selects and monitors these managers, holding them accountable for achieving specific performance benchmarks and adhering to ethical standards. This external management strategy allows the SBI to leverage specialized expertise and access a broader range of investment opportunities.

The performance of the SBI’s investments has a direct impact on the financial health of Minnesota’s public pension systems. These systems provide retirement benefits to state employees, teachers, and other public sector workers. Strong investment returns help to ensure that these pension funds have sufficient assets to meet their future obligations, protecting the retirement security of beneficiaries.

Beyond its role in managing retirement funds, the SBI also oversees the investment of other state assets, such as the Permanent School Fund and various trust funds. These investments generate income that supports education and other essential state programs. The board’s responsible management of these funds contributes to the overall financial stability of the state.

The SBI’s investment decisions are guided by a long-term perspective. The board recognizes that investing for retirement requires patience and a willingness to weather short-term market fluctuations. Its focus is on generating sustainable returns over time, rather than chasing quick gains. This long-term approach is essential for meeting the long-term liabilities of the pension systems and other state funds.

The SBI is committed to transparency and accountability. It regularly publishes information about its investment performance, policies, and governance practices. This information is available to the public, allowing stakeholders to understand how the state’s assets are being managed. The board also engages with stakeholders, including beneficiaries, legislators, and other interested parties, to solicit feedback and ensure that its investment strategies are aligned with the needs of the state.