NCIC Frequently Asked Questions

1. How did the concept of the NCIC come about?

During the 2011 Legislative Session, the Treasurer’s Office sponsored Senate Bill 75, which called for the creation of a private equity fund using a small portion of non-taxpayer dollars from the State Permanent School Fund for the express purpose of increasing investment returns to the benefit of Nevada K-12 schools and students, with the secondary objective of investing in Nevada businesses, resulting in greater economic development and employment in Nevada.

2. How did Senate Bill 75 become law?

The bill was heard in several committees, including the Senate Committee on Economic Growth and Employment, Senate Finance Committee, and the Assembly Government Affairs Committee. Senate Bill 75 was passed by both houses of the Legislature and signed into law by Governor Sandoval on June 16, 2011.

3. What is the purpose of the NCIC?

The NCIC is a nonprofit entity governed by an appointed Board of Directors. As required by Senate Bill 75, the Board hired a professional fund manager to seek private equity investment opportunities in Nevada businesses. Per Senate Bill 75, investments must be based primarily on investment return. Per NRS 387.030, investment profits will be placed in the State Distributive School Account, which is used to benefit Nevada K-12 schools and students throughout the State.

4. Who is the fund of funds manager?

Hamilton Lane was selected through a competitive RFP process and hired under contract effective August 2012. Hamilton Lane is a leading global private equity asset management firm which provides private equity management to sophisticated investors. Hamilton Lane has successfully managed similar programs in Idaho, New York, Florida, and California. As part of its mandate, Hamilton Lane is responsible for evaluating and selecting venture capital and private equity funds that will invest in Nevada companies, and will also be investing directly into Nevada businesses as a co-investor. Pursuant to its contract with NCIC, Hamilton Lane has complete discretionary authority based on sound investment and return criteria.

5. What is the Silver State Opportunities Fund?

The Silver State Opportunities Fund (SSOF) is the investment vehicle created as part of the contract with Hamilton Lane. The SSOF is managed by Hamilton Lane and is dedicated to investing in compelling businesses located in Nevada, looking to expand in Nevada, or seeking to relocate to Nevada. On behalf of the NCIC, the SSOF seeks to generate greater returns for the Nevada Permanent School Fund, and secondarily increase economic development and employment in Nevada.

6. What are the primary responsibilities of the professional fund manager, Hamilton Lane?

Develop an investment plan to be approved by the Board; maximize financial returns; hire private equity and venture capital firms with a nexus to Nevada businesses; provide education/training/networking for entrepreneurs and the investment community; and to develop collaboration between universities, entrepreneurs, investors, government, and the private industry.

7. What are the investment objectives of the NCIC?

NRS 355 sets investment return as the primary objective for the NCIC in making decisions about a private equity investment plan. The NCIC has created an investment policy that establishes its investment objectives, the first priority being to maximize risk-adjusted returns for the program within the parameters set by law, regulation, and policy. Since this is a Nevada-centric program, a secondary objective will be to create economic development and jobs in the state.

8. What are the basic investment guidelines of the NCIC?

Please refer to the NCIC’s Investment Policy for detailed guidelines.

9. What types of investments can the NCIC make through its fund manager?

By law, all sectors of private equity can be considered. Please refer to the NCIC’s Investment Policy for additional information.

10. What types of businesses are eligible for NCIC investments?

NRS 355.280 outlines the investment criteria, including that at least 70 percent of all private equity funding must be provided to businesses, “located in this State or seeking to locate in this State.” Although certain industries are identified for investment opportunities, the NCIC Board of Directors, through the professional fund manager(s) hired by the Board, may invest in any Nevada business which “will likely meet the targets for investment returns established” by the NCIC Board of Directors and “comply with sound fiduciary principles.” In accordance with NRS 355.285, Section 6, businesses receiving an investment from the NCIC must be domiciled in Nevada, have its headquarters in Nevada, have a significant percentage of its employees residing in Nevada, or be in the process of expanding or relocating to this State.

11. How do businesses apply for funding through this program?

If you are a business interested in pursuing a co-investment or you are a private equity fund manager seeking capital, we encourage you to submit information directly to Hamilton Lane. Please click here to submit your investment request.

12. How are members of the NCIC Board selected?

Per the requirements of NRS 355.270, Sections 2 and 4, the State Treasurer serves as the Chair of the NCIC. One member each is appointed to the Board by the Governor, Senate Majority Leader, Senate Minority Leader, and Speaker of the Assembly, Assembly Minority Leader, and the Chancellor of the Nevada System of Higher Education. Per adopted regulations, the appointee of the Governor serves as Vice Chair of the NCIC Board. Members are appointed to a four-year term. Vacancies are filled by the appropriate appointing authority to complete the unexpired term. Appointed members must be from the private sector who have at least 10 years of experience in the field of investment, finance, or banking.

13. What rules must the NCIC comply with?

Member rules and regulations can be found in Chapter 355 of Nevada Administrative Code (NAC). The applicable NAC Sections are 8, 9, and 11. Section 4 of the NCIC’s Investment Policy provides additional details regarding members’ roles and responsibilities.

14. How often does the NCIC Board meet and are the meetings open to the public?

NRS 355.270, Section 7 (b) requires the NCIC Board of Directors to meet at least quarterly and in accordance with the Nevada Open Meeting Law. Members of the public are invited to attend all meetings. Notice of meetings are posted on the NCIC Home Page.

15. What reporting requirement must be adhered to by the NCIC?

Besides all meetings being open to the public and subject to the Nevada Open Meeting Law, on or before December 1 of each year, the NCIC must provide an annual report to the Governor and to the Legislature that includes an accounting of all money received and expended by the NCIC. Click here for the most recent annual report.

16. Where does the investment money come from?

In accordance with NRS Section 355.280, the NCIC Board may invest up to $50 million from the State Permanent School Fund within the guidelines established by the State Legislature and in accordance with “prudent investor” standards.

17. What is the State Permanent School Fund?

Established by the Nevada Legislature in the late 1800s in Article 11, Section 3 of the Nevada Constitution, the State Permanent School Fund monies “are hereby pledged for educational purposes and the money therefrom must not be transferred to other funds for other uses.”

18. From where does the State Permanent School Fund derive its funds?

Most of the money in the State Permanent School Fund comes from fines collected under the penal laws of Nevada. Other sources of funding come from land granted by Congress to the State for educational purposes, all estates escheated to the State, and property given or bequeathed to the State for educational purposes.

19. How does the Permanent School Fund assist Nevada schools?

The interest earnings of the State Permanent School Fund are placed in the State Distributive School Account, which is appropriated among Nevada school districts and charter schools.

20. How is the money in the State Permanent School Fund currently invested?

In accordance with NRS 355.050, “the State Treasurer shall have charge of all the investments of money and the sale of all securities of the State Permanent School Fund.” Prior to Fiscal Year 2012, Nevada’s Permanent School Fund was invested entirely in U.S. government securities. In addition to an allocation to private equity, the Permanent School Fund will be invested in public equities (stocks) in the future, as provided for in Nevada law.

21. How does Senate Bill 75 change the way money in the State Permanent School Fund may be invested?

Most western states have a permanent school fund. Nevada was previously one of only two states, Colorado being the other, which did not utilize a balanced portfolio consisting of fixed income, public equity, and private equity. Most institutional investors, like pension funds (including Nevada’s Public Employee Retirement System), utilize a balanced portfolio, including allocations to alternative asset classes, such as private equity. Balance and diversified portfolios have the potential to produce higher returns while continuing to mitigate risks.

22. Who is the primary contact for the Board?

Senior Deputy Treasurer Tara Hagan, who may be reached at (775) 684-5753 or via email at trhagan@nevadatreasurer.gov.