- Associated Press - Saturday, October 7, 2017

SIOUX FALLS, S.D. (AP) - They have options.

The state’s top finance students could trade on Wall Street, hold down investing jobs in Chicago or Minneapolis or make tens of thousands of dollars more each year playing the market elsewhere.

Instead, they manage stock and bond portfolios for the state of South Dakota from a tucked-away office in southwest Sioux Falls.

Why? Because they have family ties in the state and a desire to create a stable retirement for parents, teachers and police officers.

An effort to prevent brain drain by offering top investing jobs has paid off for pensioners and the young people filling those jobs, said State Investment Officer Matt Clark.

The South Dakota Investment Council manages the state’s trust funds and retirement system, the Argus Leader reported . Year after year it outperforms market benchmarks, growing the state’s pension fund. Its consistent success has made South Dakota one of just a few states to keep its retirement system fully funded, and at times, overfunded.

Part of that success comes from selecting the best and brightest from the University of South Dakota, Northern State University and Augustana University, Clark said.

He picks the top finance students from around the state and offers them internships. If they can make it through the grueling tryout, they often get a job offer.

That pitch comes with a salary a fraction of what they could make on Wall Street, he said, about $49,000 out of the gate. So he emphasizes heavily the potential to give back to the state.

“It’s my job to turn the guilt up to full blast,” Clark joked. “I tell them, ‘Grandma would be disappointed if they don’t do it or their favorite teacher would be sad.’”

Besides working to make sure their own pension fund will be in good shape when they retire, the state’s investors guard the pensions of the state’s teachers, firefighters, policemen and state employees.

And that’s something that drives a stronger sense of purpose in their investing, they said.

“Knowing that we’re creating this great retirement for people that worked really hard all their lives and really deserve it, that’s really nice to be a part of,” said Anne Cipperley, 30, a high-yield portfolio manager.

Cipperley’s mother was a teacher and is now retired, she said, and she enjoys working to ensure that her mother’s retirement funds are kept safe.

While she knows she could find work elsewhere, Cipperley said she was glad to work in a place that encourages long-term investment strategies and that has a track record of success.

“Maybe there aren’t as many perks as at other places, or the pay isn’t as high, but at the end of the day it’s kind of like we’re on a team that keeps winning and it’s nice to be a part of something that’s been successful and you want to keep it successful,” she said.

Zach Nipp interned in Washington, D.C., while in college. He said he considered working and living out east but ultimately opted to work at the council because it is close to home and he could have a bigger impact on his family.

“There were thoughts of going out and doing the big city thing,” the 25-year-old portfolio manager said. “But my family is all here, my dad is a superintendent, my sister is an English teacher. And now they ask me how their pensions are doing.”

And compared to Langford, the town of 326 where he grew up, Sioux Falls is a big city.

“To me, Sioux Falls is just a metropolis,” he said as he brewed a pot of Folgers coffee. “I have more than enough urban development compared to where I grew up.”

For Jarrod Edelen, 37, the connection to the investment council was also personal. His mother was a legislator who voted to set up the council in 1971 and his grandmother was a university professor who drew from the state pension fund.

“Money management typically is not a very personal job, you manage that big pool of money and you don’t know who the owners of that are, but in South Dakota you see them every day. It’s our parents, our teachers, our friends,” Edelen said.

Edelen and Darci Haug, 37, manage stock portfolios and help coach younger managers Matthew Carey, 24, and Daniel Elmer, 24, to do the same.

Picking out young talent to keep the council strong can be difficult Edelen and Haug said, as managers need to assess whether those just starting out could be in it for the long haul.

“You’re just trying to really guess when you’re 21 years old whether this person is going to stay for ten years,” Haug said. “They are little investments.”

Edelen agreed, saying, “We’re planting those seeds in these guys, so that in 20 years they’ll be a big strong oak tree.”

Nearly all the council’s employees came up through the internship process, Clark said, and many began right out of college, himself included.

And while investors try not to think about every teacher, firefighter or policeman each time they decide to buy or sell, that mission drives them to succeed, he said.

“If you’re fighting for people you care about, that’s going to come through,” Clark said.

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Information from: Argus Leader, https://www.argusleader.com

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