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State investment officer reports Legacy Fund at $12.1 billion; board examines formula change
Summary
At a May 27 meeting in Bismarck, Scott Anderson of the Retirement and Investment Office reported the Legacy Fund balance at $12.1 billion, reviewed in‑state investments and a cost‑benefit analysis showing effects of raising the distribution percent from 7% to 8%.
Scott Anderson, chief investment officer for the Retirement and Investment Office, told the Legacy and Budget Stabilization Fund Advisory Board on May 27 in Bismarck that the Legacy Fund had a balance of $12.1 billion as of Feb. 28, 2025, and returned 2.5 percent year‑to‑date through February, slightly outperforming a 2.3 percent benchmark.
Why it matters: The board heard analysis of fund performance, in‑state investment exposure and a proposed change to the distribution calculation that could shift both the fund’s market value and near‑term distributions — details that can affect future state budget planning.
Anderson summarized separate fund results: the Budget Stabilization Fund had $963.6 million as of Feb. 28, 2025, and returned 1.2 percent year‑to‑date, matching its benchmark. He identified $464 million of in‑state investments, consisting of $92 million in the infrastructure revolving loan fund, $306 million in the Bank of North Dakota certificate of deposit match program, and $66 million in in‑state private equity managed by 50 South Capital.
On the distribution formula, Anderson reported a cost‑benefit analysis showing that increasing the percent‑of‑market‑value distribution from 7 percent to 8 percent is projected to reduce market value by about $2.4 billion while increasing distributions by about $1.3 billion over the next 20 years. He framed the analysis as a long‑horizon tradeoff between available principal and near‑term payouts.
Anderson also noted the agency launched a $285 million internal investment management pilot in April 2025 and estimated savings of roughly $300,000 per year from reduced external management fees. On country risk, he said the State Investment Board monitors third‑party research and has no direct or indirect investments in Cuba, Iran, North Korea, Russia, or Venezuela, “in compliance with federal regulations.”
A board member asked about sources of market uncertainty; Anderson cited tariff policies and the development of artificial intelligence as contributing factors.
Next steps: The presentation provided the board factual basis to continue discussions about distribution policy and in‑state program exposure; the meeting record does not show any formal vote on changes to distribution policy at this session.
