meeting fy13 state investment council signed …...unable to put more money into companies in order...

STATE INVESTMENT COUNCIL

MEETING

FY13

SIGNED MINUTES

March 26, 2013

ACTION SUMMARY

Item

APPROVAL OF AGENDA

STATE INVESTMENT COUNCIL

March 26.2013

Action

Approved

Pa2e#

3

APPROVAL OF MINUTES: 2/26/13 Approved 3

INVESTMENT MATTERSTriton Fund IV, L.P.Affinity Asia Pacific Fund IV, L.P.Brookfield Infrastructure Fund IIJFM Global Infrastructure FundReal Return Floating Rate Bank Loan MgrInternal equity portfolio transition

Discussion onlyCommitment up to $75mmCommitment up to $1 00mmCommitment up to $1 00mmUp to $1 00mm with ING sep acctTransfer SIC-managed large cappublic equities holdings to largecap index fisnd/Northern Trust

33479

OTHER INVESTMENT MATfERSInvestment performance reportInvestment Committee reportREP updateReal Return policy updatesNM PE program reporting items

InformationalInformationalInformationalInformationalInformational

11IIIIIIII

FINANCE MATTERSAudit Committee ReportCFO report

GOVERNANCE MATTERSGovernance Committee reportLegislative update

CLOSING MATTERSOld & New BusinessNext SIC meeting date: 4/23

Informational

InformationalInformational

InformationalInformational

12

1313

1313

PUBLIC COMMENT PERIODNone

EXECUTIVE SESSION [p. 14)Ongoing or pending litigation; investment

matters and related legal issuesLimited Personnel matters: employee

hiring/retention

10

STATE INVESTMENT OFFICER’S REPORT

No action

No action

MINUTES OF THE

NEW MEXICO STATE INVESTMENT COUNCIL

Santa Fe, New Mexico

March 26, 2013

1. OPENING MATTERS

a. Roll call and introduction of guests: quorum present

A regular meeting of the New Mexico State Investment Council was called to orderon this date at 9:00 a.m. in the Governor’s Cabinet Room, State Capitol, Santa Fe, NM.

Members Present:Mr. Peter Frank, Public Member, Vice ChairThe Honorable James B. Lewis, State TreasurerDr. Thomas Clifford, Secretary, DFAMs. Linda Eitzen, Public MemberMr. Harold Lavender, Public MemberMr. Leonard Lee Rawson, Public MemberMr. Scott Smart, Public MemberMr. John Young, Public Member

Members Absent:The Honorable Susana Martinez, GovernorThe Honorable Ray Powell, Commissioner of Public Lands[1] Vacancy

Attorney General Representative:Ms. Tania Maestas

Staff and Committee Members Present:Mr. Steven K. Moise, State Investment OfficerMr. Vince Smith, Deputy State Investment OfficerMr. Evan Land, General CounselMr. Brent Shipp, Chief Financial OfficerMr. Greg Kulka, Director of Private EquityMr. Charles Wollmann, Director of CommunicationsDr. Gerald Burke, Private Equity Investment Advisory CommitteeMr. Jim Goodwin, NMSIC Audit CommitteeMs. Kern Segell, Executive AssistantMs. Judith S. Beatty, Recorder

New Mexico State Investment Council: March 26, 2013

Guests Present:[See Sign-in Sheet.]

b. Approval of agenda

Upon motion by Mr. Lavender, seconded by Ms. Eitzen, the Agenda wasunanimously approved by voice vote, as published. [Dr. Clifford was not present forthe vote.]

c. Approval of minutes: February 26,2013

Mr. Lavender moved approval of the February 26 minutes, as submitted. Ms.Eitzen seconded the motion, which passed unanimously by voice vote. [Dr. Cliffordwas not present for the vote.1

2. INVESTMENT MATTERS: Investments requiring vote & relatedreporting Wince Smith)

a. Vote: Triton Fund IV, L.P. (LP Capital)

Mr. Smith stated that this item would not be addressed, as it was removed fromyesterday’s PEIAC agenda after Triton decided last week that it would change itsprevious agreement to abide by the terms of the SIC’s Transparency & Disclosure Policy.

b. Vote: Affinity Asia Pacific Fund IV, L.P. (ISP Capital)

Mr. Waldrop reviewed LP Capital’s and the PEJAC’s recommendation of acommitment of $75 million to Affinity Asia Pacific Fund IV, L.P. (“Affinity”). He saidthis would be the second commitment in the National Private Equity Program this year.

Mr. Waldrop said Affinity targets control-oriented buyouts in Asia, a place LPCapital has been trying to get more exposure to for the National Private Equity Program.LP Capital likes the firm’s strategy and approach in this part of the world, which givesthe investor more control over the company while they own it and the decision to exit. Hestated that the firm’s first two funds are fully realized and they have generated somerealizations in Fund III. Their results have put them in the top quartile of the relevantbenchmarks, so they have strong absolute and relative performance.

Ms. Waidrop said there has been some turnover on the team, but it has mainly beenfocused at the junior levels. The senior departures have been mainly focused aroundretirements, and LP Capital does not believe that will have an impact on strong returnsgoing forward.


Mr. Waldrop said Fund IV had a first close in February on $1.5 billion. He noted thatthis is a dollar-denominated fund, and the final close, expected at the end of June, iscapped at $3.5 billion.

Affinity Equity Partners Chairman and Managing Partner Kok-Yew Tang appearedbefore the Committee and made a presentation.

Responding to Mr. Rawson, Mr. Waldrop said LP Capital has known Affinity forsome time, having done due diligence on Fund III, and through another client hadmonitored the first two funds. He said LP Capital has known Mr. Tang and his team formore than 10 years.

Mr. Rawson noted that there was underperformance in some of the Southeast Asianinvestments in Affinity’s earlier funds, and asked why. Mr. Tang responded that Fund IIcoincided with the great financial crisis of 2009, which affected some of the portfoliocompanies. Further, the fund was relatively small and fully invested, so investors wereunable to put more money into companies in order to buy time and restructure.

Responding to Vice Chair Frank, Mr. Waldrop stated that the fUnd will beoversubscribed, as existing investors want to increase commitments substantially. He saidLP Capital feels fortunate that it has gotten access to this fund and hopes the NMSIC’sinvestment will be close to $75 million, but the expectation is that it will not be below$50 million.

Vice Chair Frank noted that the NMSIC may want to review a sampling of valuationsin the Fund IV portfolio, and Mr. Tang responded that Affinity shares valuations withsome of its larger LPs and would be happy to do so with the NMSIC.

Ms. Eitzen stated that the PEIAC reviewed this investment yesterday andunanimously recommended approval. The committee was impressed with theconservative strategy and very attractive returns.

Ms. Eitzen moved that, based upon the recommendation of the Private EquityInvestment Advisory Committee, LP Capital Advisors and NMSIC staff, theNMSIC approve an investment of up to $75 miffion, but not less than $50 million, inAffinity Asia Pacific Fund IV, L.P., not to exceed 20 percent of the total capitalcommitments to the fund, and subject to and contingent upon New Mexico state law,New Mexico State Investment Council policies, negotiation of final terms andconditions and completion of appropriate paperwork Mr. Lavender seconded themotion, which passed unanimously by voice vote.

c. Vote: Brookfield Infrastructure Fund II (Townsend Group)

Townsend Group consultant Jack Koch reviewed Townsend’s recommendation of acommitment of up to $100 million to Brookfield Infrastructure Fund II (BIF II).


-- BIF II is a $5 billion core/core-plus closed end private infrastructure fund focusedon acquiring a diversified portfolio of infrastructure assets on a value basis in NorthAmerica, Europe, South America and Australasia (Australia and New Zealand).

-- BIF II is sponsored by Brookfleld Asset Management (Brookfield) and continuesthe strategy of its predecessor fund. Unlike the first fund, which was primarily focused inNorth America and South America, this fund has expanded its geographic reach intoEurope and Australia.

-- The targeted assets of this fund will typically have high barriers to entry, uniquelocations, or other similar competitive advantages.

-- BIF II differentiates itself from its peers by focusing on large transactions wherecompetition may be limited and structure complexity allows for value creation.

-- BIF II is targeting a gross IRR of at least 15 percent (net 12 percent) with a cashyield of 5 percent and a 2.Ox equity multiple. To achieve the target return, Brookfield willacquire controlling ownership in 15 to 25 portfolio investments requiring $200-$500million of equity per transaction. Leverage on individual assets will range from 50percent to 70 percent.

-- BIF II will target the following infrastructure sectors: renewable power, 35percent; transportation, 35 percent; utilities, 15 percent; and energy, 15 percent.

-- Brookfield expects 40 percent of the fund to be in North America, with 25 percentin Europe, 20 percent in South America, and the remainder in Australasia.

Mr. Koch referred to a list of issues or concerns in Townsend’s report.

-- Although the infrastructure team certainly exhibits the ability to source andexecute transactions in all of the stated sectors, the actual relevant data available toanalyze the track record is limited because a substantial amount was acquired on theirbalance sheet.

-- In addition, the acquisitions in Fund I took place between 2009 and 2012, and sothe number of realizations that have taken place is very limited. However, they haveinvested $8.1 billion in infrastructure over this time period, acquiring $15.5 billion worthof assets, and these investments are currently generating a gross IRR of over 30 percentand a 2.8x equity multiple.

-- As of September, Fund I had invested $1.4 billion in 14 assets, and that gross ERRtoday is at 25.8 percent and 18.5 percent on a net basis with a 6 percent cash yield.


Mr. Koch also noted that, with respect to Brookfleld’s retail and real estate platformin Brazil, there are a number of bribery accusations that Brookfield is currently facing.This specifically relates to a retail shopping center portfolio and whether a third partyconsultant hired by Brookfield got construction financing through bribery. He saidTownsend has extensively researched this. In summary, Brookfleld had uncovered fraudconmiitted by an employee, whom they fired for embezzlement of funds, and theemployee turned around and filed these accusations against Brookfleld.

Mr. Koch stated that Townsend has met with a third party law firm that specializes inforeign corrupt practices that Brookfield hired to undertake a full investigation of theBrookfield platform. Townsend’s conversations with the third party point to the fact thatthere is no evidence supporting the accusations.

Mr. Koch noted that about 60 percent of this fund will likely be denominated inforeign currencies, so the NMSIC will be taking some currency risk. Brookfield willhedge against some of this once they have established liquidity requirements and the costassociated with establishing the hedging strategy.

[Secretary Clifford stepped away from the proceedings.]

Brookfleld representatives George Myhal, Sam Pollock and Chris Harris made apresentation.

Mr. Rawson asked Brookfield representatives what actions they have taken, or whatcontrols they have put in place, to prevent another case of embezzlement such ashappened in Brazil.

Mr. Myhal responded that the controls in place had worked and had caught theembezzlement, even given the sophisticated nature of the fraud and the collusion present.The employee in question, who was hired in the U.S., had perpetrated a similar fraudwith a previous employer, but somehow had come in with clean references. He said theinternal auditors produced a full report with a number of recommendations to strengtheninternal controls. Brookfield has been operating in Brazil for more than 100 years, has agood management team there, and continues to work on strengthening their internalcontrols.

Vice Chair Frank noted that a lot of Brookfleld’s investments will be subject togovernmental regulations and rate-setting processes. He asked how, in an inflationaryscenario over the next 10 years, Brookfield will be able to deal with this particular riskfactor.

Mr. Pollock responded that, in their first fund, about 85 percent of the cash flows areeither regulated or under long-term contracts, and around 65 percent have inflationindexation so a large portion would be protected. He said the biggest challenge withinflation indexation is actually in North America because the regulatory environment


doesn’t provide for that indexation in a utility acquisition. He added that regulators resetrates, though, and over time they will take into account where interest rates and inflationstand, so it tends to regulate itself.

Mr. Pollock said Brookfleld would have no problem with allowing the NMSIC toreview, and if desired, do detailed valuations of companies in the Brookfield portfolio.

Mr. Lavender noted that the Council Investment Committee unanimouslyrecommended approval of this investment, as did the advisors on the committee.

Based on the recommendations of the Council Investment Committee, theTownsend Group and NMSIC staff, Mr. Lavender moved that the State InvestmentCouncil approve investment of up to $100 million to Brookfield Infrastructure FundII, L.P., subject to and contingent upon New Mexico state law, New Mexico StateInvestment Council policies, negotiation of fmal terms and conditions andcompletion of appropriate paperwork Mr. Young seconded the motion, whichpassed unanimously by voice vote. [Secretary Clifford was not present for the vote.J

d. Vote: IFM Global Infrastructure Fund (Townsend Group~

Townsend Group consultant Jack Koch reviewed Townsend’s recommendation of acommitment of up to $100 million to Industry Funds Management Global InfrastructureFund (IFM).

-- IFM is a global open-ended infrastructure fund currently consisting of sevenassets (soon to be eight). Gross and net asset value is $8.4 billion and $3.9 billionrespectively. IFM is a global asset manager based in Melbourne, with $40 billion AUM,invested across four asset classes: infrastructure, debt, listed securities and private equity.They invest in North America, Australia and Europe.

-- IFM is wholly owned by an investor group of 30 Australian not-for-profit pensionplans, which provides strong alignment with respect to the ultimate goals.

-- IFM and its predecessor entities have been active investors in infrastructure for 18years; over this time, the infrastructure group has grown to 45 investment professionalsand $13 billion of AUM. IFM Global Infrastructure Fund was established in 2004 as theflagship vehicle to invest outside of Australia. The fund targets a net 10 percent returnover a three-year rolling period and distributable cash yield of 6-8 percent.

-- Strategy consists of building a diversified infrastructure portfolio by geography,sector and revenue driver.

-- The fund today is invested 45 percent in the US, 32 percent in the UK, 12 percentin Poland and 11 percent in Germany. Additionally, it has exposure to seven different


sectors with regulated and contractual revenue accounting for the largest percentage ofNAV at 65 percent and 25 percent respectively.

-- The US investment sleeve has had very strong returns: in 2012, the fund achieved11.3 percent net IRR and since inception in 2009 has generated a 10.3 percent IRR.Townsend is projecting returns at 11-12 percent from 2013 through 2015 withdistributable cash yield growing from 4.3 percent to 6+ percent in 2015.

Mr. Koch stated that the risk profile of the find has changed as a result of newinvestment activity. Since inception, IFM has been positioned very defensively with 65percent ofNAy allocated to regulated assets. Recently, FM announced the acquisition ofa 35 percent interest in Manchester Airport Group, which will require $1.2 billion of findequity and will result in exposure to five airports in the UK. However, airport revenue isdriven by user fees and thus is closely tied to economic cycles of regions. In reality, thisis in line with the strategy of this fund, which was created to be diversified by geography,sector and revenue driver. Prior to this, he noted that the fund had no exposure to airportsor other forms of patronage revenue. Whether there will be slow or fast recovery in thecurrent economic cycle, this will provide investors exposure to that recovery via GDP.

[Secretary Clifford returned to the proceedings.)

IFM representatives Alec Montgomery and Brian Clarke made a presentation.

Vice Chair Frank commented that this is an open-ended fund, and as fiduciary, theNMSIC has to be comfortable with each of the underlying investments. He askedTownsend and NMSIC staff how much due diligence was done on these investments, andif were the NMSIC’s money directly, would it be buying at these prices.

Mr. Koch responded that the amount of due diligence Townsend did on theunderlying assets was deeply detailed, and Townsend believes there is upside potential,as outlined in their report. He noted that there are some regulatory assets that could haveupside, given their impending due dates, and “our view is that the amount of analysis wehave done makes us very comfortable that the valuations are attractive today.”

Vice Chair Frank stressed the importance of having good documentation that thenecessary work has been done on each of the underlying assets and everyone iscomfortable with the regulatory environment, any re-ups, pricing, valuations and so forth.

Mr. Clarke responded that IFM has gone through this with many very large stateplans, but in the case of Townsend and NMSIC staff (Lisa Bacon), “they took us to alevel above. They weren’t satisfied with the independent valuations. They looked at theunderlying cash flows of the businesses. They then looked at the business plansthemselves. They asked for additional material. It was quite extensive and quiteextraordinary.”

New Mexico State Investment Council: March 26,2013

Mr. Montgomery added that IFM rotates its independent valuators off every threeyears so they can have a new set of eyes on the valuations. The valuations are donequarterly, audits are conducted twice a year, and these are completely available to theinvestors. He said investors can choose to challenge the valuations, as well.

Mr. Lavender stated that the Council Investment Committee and its advisorsunanimously recommended approval of this investment.

Based on the recommendations of the Council Investment Committee, theTownsend Group and NMSIC staff, Mr. Lavender moved that the State InvestmentCouncil approve an investment of up to $100 million to IFM Global InfrastructureFund, L.P. subject to and contingent upon New Mexico state law, New Mexico StateInvestment Council policies, negotiation of fmal terms and conditions andcompletion of appropriate paperwork. Mr. Young seconded the motion, whichpassed unanimously by voice vote.

e. Vote: Real Return Floating Rate Bank Loan Manager(Vince Smith, RV Kuhnsl

Mr. Smith reported that an RFP was issued on January 4, 2013, for a Real ReturnFloating Rate Bank Loan Manager, and a total of 28 firms responded. One respondentoffered two strategies, bringing the total number of responses to 29 unique investmentproducts. The field was narrowed down to five semi-finalists. Following extensivediscussion, one of the semi-finalists was removed from the list and site visits and duediligence was conducted on the remaining four.

Mr. Smith reported that, at the conclusion of the due diligence, the SIC EvaluationCommittee and RV Kuhns agreed to recommend to the NMSIC that mandates beawarded to ING Investment Management Co., LLC, and Western Asset Management.Shortly after this, Western Asset Management announced that their chief investmentofficer would be retiring in the following year. He said staff and RV Kuhns would like toconduct further due diligence over the next month, given this development, and soWestern Asset Management would not be making a presentation today. Depending on theresults of this due diligence, either Western Asset Management or a third finalist, CreditSuisse Asset Management, would appear before the NMSIC at the May meeting.

ING representatives Ralph Bucher, Robert Wilson and Sandy Sinor made apresentation.

Mr. Smith stated that the NMSIC has $150-$200 million to invest in two separateaccounts.

Mr. Wilson stated that, from a holdings standpoint, the portfolio will have 35-37industry groupings that will be weighted based on ING’s macro view of the economicenvironments among the sectors. He said they tend to have holdings of anywhere


between 50 basis points and 1 percent of the portfolio, so a $100 million portfolio wouldhave 75-125 different holdings.

Based on the recommendations of the RFP selection committee, the CouncilInvestment Committee, RV Kuhns and NMSIC staff, Mr. Young moved that theState Investment Council approve investment mandates of up to $100 million in aseparate account for floating rate bank loans with ING Investment ManagementCo., LLC, in accordance with terms and guidelines discussed by the Council today,subject to and contingent upon New Mexico state law, New Mexico State InvestmentCouncil policies, negotiation of final terms and conditions and completion ofappropriate paperwork Ms. Eitzen seconded the motion, which passed by voicevote, with Secretary Clifford voting against the motion, stating that he did not haveenough information to be comfortable in voting for this investment.

f. Vote: Internal equity portfolio transition (Smith, RV Kuhns)

Mr. Smith discussed his rationale for recommending the NMSIC discontinue theinternally managed equity portfolio so that staff assigned to this area can be redeployedinto other areas to help produce a higher rate of return over time.

Mr. Smith reviewed an organizational chart divided into four investment areas:Global Growth Group; Investment Strategy & Research Group; Stable Value & RiskManagement Group; and Real Return Group. He said a model he created to quanti~ theimpact of this restructuring reflected a 35 percent increase in NMSIC’s ability to deployresources more effectively to the portfolio.

Mr. Smith asked the NMSIC to approve the transfer of the internally managedportfolio to the large cap index find managed by Northern Trust.

Based on the recommendations of RV Kuhns and NMSIC staff, Mr. Lavendermoved that the State Investment Council approve the transfer of the SIC-managedlarge cap public equities holdings to the SIC large cap index fund managed byNorthern Trust. Mr. Young seconded the motion.

The motion passed unanimously by voice vote.

[5-minute break.]

3. OTHER INVESTMENT MATTERS: (Smith)

a. Investment performance report (Smith & RV KuhnsI

Mr. Smith reported February’s total FYTD return for the fund at 10.26 percent and 1-year return at 9.61 percent.

New Mexico State Investment Council; March 26, 2013

Mr. Smith said the portfolio continues to lag in the international equity area, which iscurrently being indexed until the NMSIC can fund the managers it has already selected.He noted that, for the past six months, each of these managers has performed ahead of thebenchmark that the NMSIC assigned to them — total performance, net of fees, would haveadded roughly $11 million to the NMSIC international equity portfolio.

b. Investment Committee report (Harold Lavender)

Mr. Lavender commended Kern Segell on doing an excellent job every month on theCIC minutes.

Noting Mr. Smith’s comments about the NMSIC having to index internationalequities because there is no legislative authorization for fhnding active management ofthat space, Mr. Lavender said he hoped the NMSIC would continue to educate legislatorsabout the need for appropriately funding SIC operations. Mr. Smith agreed this should bea priority.

c. RFP update (Smith)

Mr. Smith stated that there has been no change from last month’s report.

d. Real Return Policy updates (informational, includes Feb updates)

Mr. Rawson said he would personally prefer that benchmark percentages be left outof the policy altogether, since they can vary from year to year. He noted his comments atthe February meeting, when he said he thought the performance benchmarks were toolow managers hitting these benchmarks might see them as justification for relativelypoor performance.

Vice Chair Frank commented that the NMSIC has to have some sense of what toexpect, but agreed that the NMSIC should monitor the benchmarks.

e. New Mexico Private Equity Program reporting items (informational)

[Report was in the Council packet for review.]

4. STATE INVESTMENT OFFICER’S REPORT (Steve Moise)

-- NAV as of this morning was $l6.908 billion. Total distributions over the past 12months: $717 million.

Council matters

New Mexico State Investment Council: March 26,2013

-- Updated dashboard report was in the Council packet.

-- April NMSIC & committee meetings:a. Investment — Wednesday 4/10 at 10:00 a.m., SIC offices.b. SIC Tuesday 4/23 at 9:00 a.m., Cabinet Roomc. Audit Tuesday 4/23 at 7:30 a.m., Governor’s Conference Roomd. Governance — Friday 4/19 at 10:00 am., SIC officese. PEIAC — Monday 4/22 at 2:00 p.m., SIC offices

-- Appointments of Members Lavender, Rawson and Young were confirmed by theSenate Rules Committee and Senate.

-- Member appointment by Legislative Council is expected in April or May.

Office Administration

-- HEK submitted a draft of their final fiduciary review report yesterday. TheCouncil will receive a copy of the report at the April meeting.

-- Restructuring of investment stafi including filing vacant positions, will be a topicof discussion at the April meeting. This has taken months of careful analysis by VinceSmith.

-- Compensation requests are still pending. Requests for three exempt positionswere authorized in FIB 2 (Real Return, Stable Value, and Global Markets). Still pendingis a request for a Deputy General Counsel.

-- Annual Accomplishments & Goals report is being prepared by management andwill be presented next month to the Governance Committee and to the Council. Anycomments, criticisms, or suggestions for improvements are encouraged.

External relations

-- Mr. Rawson will report on 2013 legislative matters.

-- Recent media reports have included topics relevant to the NMSIC, with thanks toCharles Wollmann for coordinating.

5. FINANCE MATTERS: COMMITTEE & INFORMATIONAL REPORTS:DISCUSSION (Peter Frank)

a. Audit Committee report (Peter Frank)

Audit Committee member Jim Goodwin reported on this morning’s meeting.


-- CliftonLarsonAllen has begun the quarterly continuous audit work for the firsttwo quarters of this fiscal year.

-- Reviewed the financial report and discussed the budget.

-- Discussed the proposed third party repo program and whether its primary drivershould be whether the program is good for investment purposes rather than just to offsetcustodial fees for budgetary purposes.

-- Discussed the ETB’s Oppenheimer settlement, relating to valuations. A whitepaper is being prepared regarding the responsibilities of the Audit Committee andNMSIC with respect to the valuation process.

b. CFO report (Brent Shipp)

Mr. Shipp stated that his report was in the packet for review.

6. GOVERNANCE MATTERS: COMMITTEE REPORTS; DISCUSSIONAND VOTE (Scoff Smart)

a. Governance Committee report (Smart)

Mr. Smart stated that the minutes of the March 14 meeting were in the packet. Hesaid the committee continued its discussion on the need for approval of requestedcompensation increases, made more than 18 months ago.

b. Legislative update (Leonard Lee Rawson & Lavender)

Mr. Rawson summarized the report of the Legislative Working Group, which was inthe Council packet.

7. CLOSING MATTERS (Governor Martinez)

a. Old or new business

None.

b. Next SIC meeting date: Tues., April 23, 9:00 a.m.. Santa Fe, NM


8. PUBLIC COMMENT PERIOD (Governor Martinez)

None.

9. VOTE TO ENTER EXECUTIVE SESSION PURSUANT TO NMSA 1978:

a. &1O-15-1(H)(7) Ongoing or pending litigation: investment mattersand related legal issues

b. §10-15-1(ll)(2): Limited Personnel Matters: employee hiring andretention

Mr. Lavender moved that the NMSIC enter executive session, pursuant toNMSA 1978 Section 1O-15-1(H)(7), to discuss ongoing or pending litigation:investment matters and related legal issues; and to discuss as allowed under Section1O-15-1(H)(2), Limited Personnel matters, employee hiring and retention. Mr.Smart seconded the motion, which passed on the following roll call vote:

For: Secretary Clifford; Mr. Frank; Ms. Eitzen; Mr. Lavender; TreasurerLewis; Mr. Rawson; Mr. Smart; Mr. Young.

Against: None.

[Council was in executive session from 1:15 to 1:30 p.m.]

It was affirmed that the only matters discussed in Executive Session were those listedon the agenda.

10. ADJOURNMENT

Its business completed, the State Investment Council adjourned the meeting at 1:30p.m.

Approved by:

Peter Frank, Vice-Chair SIC


meeting fy13 state investment council signed …...unable to put more money into companies in order...

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