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State Board of Investment approves Fidelity emerging‑markets hire and up to $1.025 billion in private commitments
Summary
At its Dec. 10, 2024 meeting, the Minnesota State Board of Investment reviewed quarterly performance—reporting $149.9 billion in assets under management and strong returns—and approved an IAC‑backed retention of Fidelity for a concentrated emerging‑markets strategy and six private‑market commitments totaling up to $1.025 billion. Approvals are non‑binding pending formal agreements and due diligence.
The Minnesota State Board of Investment met Dec. 10, 2024, and approved a set of investment actions while reviewing quarterly performance for the Combined Funds.
Governor Tim Walz, chair of the State Board of Investment, called the meeting to order. Executive Director Jill E. Schurtz presented the Quarterly Performance Summary as of Sept. 30, 2024, reporting $149.9 billion in assets under management and $97.6 billion in the Combined Funds. Schurtz said the Combined Funds returned 5.0% for the quarter and 20.2% for the 12‑month period and have outperformed their Composite Index over a 10‑year horizon while providing a real return above inflation over 20 years.
Gary Martin, chair of the Investment Advisory Council, told the board that the IAC unanimously endorsed staff’s recommendation to retain Fidelity Institutional Asset Management to implement a Concentrated Emerging Markets Strategy. On the motion of Secretary of State Steve Simon, the board approved that recommendation. The board’s approval is an authorization for staff to proceed; it is not a binding contract. The meeting record states that final terms and execution of any Investment Management Agreement remain subject to further due diligence and negotiation by the Executive Director and SBI legal counsel.
The board also approved authorizing the Executive Director, with assistance from SBI legal counsel, to negotiate and execute prospective commitments to six private‑markets funds, on the motion of State Auditor Julie Blaha. The authorized maximum commitments listed in the meeting materials are: Blackstone Energy Transition Partners IV (up to $50 million); HPS Strategic Investment Partners VI (up to $200 million); IK Small Cap IV Fund (up to $125 million); KKR North America Fund XIV (up to $400 million); Nordic Capital Evolution Fund II (up to $125 million); and EQT Infrastructure VI (up to $125 million). The materials note it is understood a commitment will not exceed 20% of a fund and that an additional amount up to 1% of the commitment for closing‑related charges may be required. As with the Fidelity matter, approvals do not create binding legal obligations until the Executive Director executes formal agreements following due diligence.
Members of the public submitted written testimony, which Governor Walz acknowledged and Executive Director Schurtz thanked. The meeting packet included several informational reports, including the Public Markets Investment Report; Participant Directed Investment Program and Non‑Retirement Investment Program Report; Aon Market Environmental Report; Meketa Capital Markets Outlook & Risk Report; and the SBI Comprehensive Performance Report.
A motion to adjourn passed and the meeting ended at 10:26 a.m. The board’s approvals authorize staff to continue negotiations and due diligence; no executed contracts were reported at the meeting.
