For decades, North Carolina has stood as a historical outlier in the world of institutional finance.[1] As the steward of one of the nation’s largest public pension plans—valued at approximately $139 billion—the North Carolina State Treasurer held a level of individual authority rarely seen in modern public investment governance.[2] While most states moved toward board-governed models, North Carolina remained one of only three states utilizing a “sole fiduciary” model, where a single elected official possessed the final word on the investment of billions of dollars.[3]
That era officially came to an end on June 13, 2025, when Governor Josh Stein signed House Bill 506, the 2025 State Investment Modernization Act (the “Act”), into law.[4] Recommended by State Treasurer Brad Briner, the Act represents a significant overhaul of North Carolina’s investment infrastructure.[5] By shifting authority to a newly created North Carolina Investment Authority (“NCIA”), the legislation fundamentally reorders the state’s approach to investment decisions.[6]
The centerpiece of the Act is the creation of the NCIA, an independent state agency tasked with managing the state’s investment programs previously housed within the Department of State Treasurer.[7] This transition, effective January 1, 2026, replaces the sole fiduciary with a five-member Board of Directors.[8]
The composition of this Board includes the State Treasurer as an ex officio member, with the remaining four seats appointed by the Governor, the Speaker of the House, the President Pro Tempore of the Senate, and the Treasurer himself.[9] Crucially, the Act mandates that these appointees be financial professionals with a minimum of ten years of experience in managing substantial portfolios.[10] Additionally, the Board will appoint a Chief Investment Officer, who must have a minimum of a 15-year successful track record of managing pensions, endowments, and other investments.[11] The inaugural board is composed of Treasurer Briner, Dan Ward, Mark Roberts, and Stephanie Lynch, with Governor Stein’s nominee yet to be announced.[12] Mark Roberts, the chief investment officer of Ironside Asset Advisors and former Director of Global Equities and Hedged Strategies for the North Carolina Retirement Systems, is the Board’s Chief Investment Officer.[13]
This move toward a board-of-experts model aims to solve the “key person risk”—the vulnerability of a massive fund to the personal whims or varying financial literacy of a single politician.[14] By diversifying the decision-making body, the Act helps to insulate long-term investment strategies from the volatility of individual election cycles.
Beyond governance, the Act grants the NCIA significantly more breathing room regarding asset allocation.[15]Historically, the North Carolina pension fund has been characterized by a conservative asset allocation—largely restricted by statute to high-quality fixed income and public equities—which some credit for its stability but others blame for significantly trailing the returns of peer states.[16]
The Act addresses this by raising the caps on various investment classes.[17] For example, it increases the allowable percentage of Retirement Systems’ assets that can be invested in certain equity and alternative funds from 35% to 80% of the total market value.[18] It also raises the cap on the Escheat Fund’s investment flexibility from 10% to 80%.[19]These changes reflect a desire to allow for more flexibility and diversification of the state’s portfolio.
Notably, the original edition of the Act included provisions allowing the NCIA to invest in digital assets, including cryptocurrency and stablecoins.[20] While these provisions were ultimately stricken from the bill, other legislative proposals—such as House Bill 92—sought to explicitly authorize the state to invest up to 5% of its portfolio in digital assets like Bitcoin, the final version of the Modernization Act focused primarily on structural governance.[21]
Overall, the Act is more than just a financial update; it is a realignment of North Carolina’s investment strategy. By relieving the State Treasurer of the sole responsibility and power over billions of dollars, the General Assembly has successfully redistributed that power to an independent board of financial professionals. The Act is a step in the right direction toward improving North Carolina’s investments. Afterall, in the words of Governor Stein, the North Carolina’s investments will be “stronger when more voices are involved.”[22]
[1] Press Release, N.C. Dep’t of State Treasurer, Policy Priority of Treasurer Brad Briner Signed into Law (June 13, 2025), https://www.nctreasurer.gov/news/press-releases/2025/06/13/policy-priority-treasurer-brad-briner-signed-law.
[2] Id.
[3] Id.
[4] Id.
[5] H.B. 506, 2025 Gen. Assemb., Reg. Sess. (N.C. 2025).
[6] Id.
[7] H.B. 506 § 147-70.1.
[8] H.B. 506 Part III.
[9] H.B. 506 § 147-71.1.
[10] Id.
[11] H. B. 506 § 147-72.1.
[12] Press Release, N.C. Dep’t of State Treasurer, Newly Created N.C. Investment Authority Board Holds Inaugural Meeting (August 27, 2025), https://www.nctreasurer.gov/news/press-releases/2025/08/27/newly-created-nc-investment-authority-board-holds-inaugural-meeting.
[13] Id.
[14] Simon Bedard, Key Person Risk: What is it Costing Your Business?, Forbes Bus. Council (January 10, 2024), https://www.forbes.com/councils/forbesbusinesscouncil/2024/01/10/key-person-risk-what-is-it-costing-your-business/.
[15] H.B. 506 § 147-69.2.
[16] State Employees Association of North Carolina, Pension Underperforms Its Peers By $1 Billion (August 15, 2014), https://www.seanc.org/news/pension-underperforms-its-peers-by-1-billion.
[17] Supra note 15.
[18] Id.
[19] Id.
[20] Edition 1, H.B. 506 , 2025 Gen. Assemb., Reg. Sess. (N.C. March 26, 2025).
[21] See H.B. 92, 2025 Gen. Assemb., Reg. Sess. (N.C. 2025).
[22] N.C. Dep’t of State Treasurer, supra note 1.
