Dakota Cement Trust (South Dakota)

At a glance. The Dakota Cement Trust holds the proceeds of South Dakota's 2001 sale of its State Cement Plant. Managed by the South Dakota Investment Council, it was worth USD 392.3 million at 30 June 2026 after an 8.2 percent net return. Each year it pays 4 percent of a smoothed market value to the state general fund for education, while the original USD 238 million principal stays intact. S4 S1

Key points

• Fair value of USD 392.3 million at 30 June 2026 (unaudited), up from USD 376.7 million a year earlier. S4 S1
• Net return of 8.2 percent in fiscal 2026 and 5.6 percent in fiscal 2025. S4 S1
• Annualised to June 2025: 6.4 percent over five years, 6.1 percent over ten and 6.8 percent over 24 years. S1
• Since 2012 the payout is 4 percent of the lower of a 16-quarter average or year-end market value. S1
• It has paid USD 312.4 million to the general fund since inception, including USD 15.1 million in fiscal 2025. S1
• About 74 percent is managed internally by SDIC staff; private equity and real estate use outside funds. S1

Interesting facts

• Cash and money market funds made up 42.4 percent of the trust at June 2025. S1
• Inflation-adjusted principal was USD 432.8 million in 2025, against a nominal USD 238 million. S1
• SDIC manages nearly USD 21 billion across the state, including this trust. S5

Mandate and goals

The trust pays a steady distribution to the general fund for education and aims for long-term growth after inflation, with the original principal kept inviolate. S1 S2

• Pay 4 percent of market value each year to the general fund. S1
• Grow the fund in real terms so the payout can rise. S1
• Invest under the prudent-person standard in state law. S1

How it invests

Published criteria

• Benchmark weights since 2022: public equity 50 percent, investment grade debt 30, real estate 11, high yield 7, cash 2. S1
• Long-term expected return of 5.8 percent with 13.6 percent volatility (June 2025). S1

Fund commitments

Past investments

Case studies

From cement plant to endowment S1 S2

• What: South Dakota sold its State Cement Plant and placed the net proceeds in a constitutional trust.
• When: 2001
• Size: USD 238M principal
• Why: Turn a state-owned business into a permanent source of school funding.
• Outcome: Fair value of USD 392.3 million in 2026 and USD 312.4 million paid to the general fund.

A smoothed payout rule S1

• What: Voters changed the distribution to 4 percent of the lower of a 16-quarter average or year-end market value.
• When: 2012
• Size: Not published
• Why: Tie payouts to fund value and smooth them across market cycles.
• Outcome: Fiscal 2025 distribution of USD 15.1 million.

Investment process

The SDIC Board sets policy and appoints the State Investment Officer, whose staff recommend policy and run internal portfolios. The allocation has moved over time toward that of the state retirement system. S1 S6

1. The Council approves the benchmark mix and ranges. S1
2. Staff manage public equity, bonds and cash internally. S1
3. Private equity and real estate are committed to outside funds. S1
4. The Treasurer pays the 4 percent distribution to the general fund. S1

How to approach: Outside managers are selected by SDIC; completed manager actions are posted on its site. S3

Size and returns

• Headline size: USD 392.3M (Fund market value, as of 2026-06-30) S4
• In US dollars: about USD 0.392B. Fair value, 30 June 2026, unaudited
• Fair value, June 2025 (audited year): USD 376.7M (Fund market value, as of 2025-06-30) S1
• Original principal: USD 238M (Committed or authorised capital, as of 2025-06-30) S1
• Return, year to 30 June 2026: 8.2 percent (net of fees, unaudited) S4
• Return, 5 years to June 2025: 6.4 percent a year S1
• Return, 10 years to June 2025: 6.1 percent a year S1
• Return, 24 years to June 2025: 6.8 percent a year S1

Leadership

Governance and transparency

• Legal basis: South Dakota Constitution art. XIII, sections 20 and 21; SDCL 4-5-47 and 4-5-27 S1 S2
• Oversight: South Dakota Investment Council; principal may not be spent S1
• Annual report lists every fund position at cost and fair value. S1
• Audit reports are posted on the SDIC site. S3

Transparency score: 5.5 of 10 (band 3 of 5). Our own 10-item rubric; see the methodology page.

• Published: total assets, annual return, governance and mandate documents, named leadership, regular reporting schedule. S2 S4 S6
• Partly published: audited financial statements. S3
• Not published: long-term returns, asset allocation, geographic or sector split, holdings or deal list. S1

History

Reports

• SDIC Annual Report 2025: https://sdic.sd.gov/docs/Annual%20Report%202025.pdf S1
• Returns and fair values, fiscal 2026: https://sdic.sd.gov/assets/performance-update.aspx S4

Common questions

How large is the Dakota Cement Trust?

USD 392.3 million at 30 June 2026 (unaudited). S4

Where did the money come from?

The 2001 sale of the State Cement Plant. S1

How much does it pay out?

4 percent of a smoothed market value each year; USD 15.1 million in fiscal 2025. S1

Who manages it?

The South Dakota Investment Council, led by State Investment Officer Matthew L. Clark. S6

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• Alberta Heritage Savings Trust Fund Canada (Alberta) · C$31.9B
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All sovereign wealth funds in North America · All sub-national permanent funds · All funds in United States

Sources

1. S1South Dakota Investment Council, Annual Report 2025
2. S2South Dakota Secretary of State, 2001 constitutional amendment text
3. S3South Dakota Investment Council, Home
4. S4SDIC, Returns and fair values, fiscal year to 30 June 2026
5. S5KOTA TV, lawmakers approve SDIC pay package, 15 April 2026
6. S6SDIC, Board