Private equity investments.                                            06LSO-0091.C1

FISCAL NOTE

 

This bill contains an appropriation of $50,000,000 from the GENERAL FUND to the proposed Private Equity Investment Account within the Permanent Mineral Trust Fund.

 

It is assumed that no investment income would be received during the three year time period from fiscal year 2007-09, as this would be the period that the fund would be drawing down capital.  Returns are not generally seen for the first five to seven years.  Thus no investment income would be seen during this time.  However, the expected long-term (10+years) rate of return on private equity is between 12% and 14%.

 

It is also assumed that the management fees for this private equity fund would be paid from the $50,000,000 appropriation. Typical management fees are 2.0% - 2.5% on committed capital.

 

 

 

 

 

 

 

 

 

Prepared by:   Sharon Garland, Treasurer's Office    Phone:   777-7475