Sun Mountain CapitalNew Mexico Private Equity Program

Performance Update – Q1 2017

Presented to

The New Mexico State Investment Council

September 2017

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Disclaimer

The preceding presentation relies on information provided by third parties, including the New Mexico State Investment Council (“NMSIC”),NMSIC’s General Partners and/or Invient, NMSIC’s data provider. The analysis included herein is dependent on such information beingcomplete and accurate in all material respects. Additionally, analysis may utilize or involve forward-looking information that is derived in partfrom longer-term historical data provided by third-party sources.

In addition, projected results, if any, are based on a number of assumptions, including returns, fund size, economic terms, targetedinvestment allocation and other factors. Due to various risks and uncertainties, the projections in this presentation may differ materiallyfrom actual results or change significantly if any one or more of the assumptions are changed. As such, undue reliance should not be placedon such information.

Economic development data including employment, payroll and dollars spent in the State of New Mexico is collected quarterly for bothactive companies in the NMPEIP as well as those in which portfolio funds no longer have an active interest. For active companies, SunMountain Capital Advisors conducts quarterly surveys of fund managers to collect economic development data. For companies no longerobligated to report to NMPEIP fund managers, data is based on the most recent and materially reliable of 1) last reported data, 2) directoutreach to companies to collect data or 3) independently verified data provided by third party entities. Annually, Sun Mountain CapitalAdvisors reviews fund manager data submissions by directly contacting a sampling of underlying portfolio companies to verify accuracy ofdata.

Nothing herein is intended to serve as investment advice, a recommendation of any particular investment or type of investment, asuggestion of merits of purchasing or selling securities, or an invitation or inducement to engage in investment activity.

This report is solely for the use of NMSIC. No part of it may be circulated, quoted, or reproduced without prior approval from Sun MountainCapital Advisors or the New Mexico State Investment Council.

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NMPEIP Q1 2017 Performance Summary

• Currently the program has a net deployed capital of $264.4 million versus a statutory cap of $420.4 million

• Net deployed capital represents 5.5% of the Severance Tax Permanent Fund (“STPF”), on schedule to achieve the approved long term target allocation of 5.0%

• Since inception financial performance continues to be adversely impacted by investments made before 2004

* IRR data based on Invient report as of 3/31/2017. Invient manages all of the data on behalf of the NMSIC, and Sun

Mountain has access to the data. 1 yr., 3 yr. and 5 yr. IRR data represents the IRR performance of the program for the 1, 3

and 5 years preceding 3/31/2017, respectively. “Prior to 2004” includes all funds that received the initial commitment before

12/31/2003. “2004 to Present” includes all funds that have received the initial commitment after 1/1/2004.

Internal Rate of Return*

Fund Group 1 yr. 3 yr. 5 yr. Inception

NMPEIP Aggregate 8.8% 6.3% 7.1% 0.9%

2004 to Present 8.0% 7.5% 8.0% 5.5%

Prior to 2004 21.0% -3.9% 1.9% -5.7%

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• Since 2004, the program has improved from -22.7% IRR to 0.9% IRR

2004 to Present – Snapshot

• Source: All performance data is from Invient.

IRR data represents the period end IRR performance. For

instance in 2004, that represents the 12/31/2004 performance.

Further, for 2017, the IRR is as of 03/31/2017.

-25%

-20%

-15%

-10%

-5%

0%

5%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

$(10,000)

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$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

Net

IRR

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Investment Performance

Contributed in the Year Distributed in the Year IRR As of Period End

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• In 2014 the NMSIC approved a pacing plan calling for a 5% allocation of the STPF and annual commitments of $30-35 million

• The NMSIC has approved commitments averaging $30.5 million per year since then

• As of March 31, 2017 the program is at 5.5% and on pace to achieve its long-term allocation of 5.0%

• Due to the change in 2016 to the NMPEIP statute which negated the requirement for a Fund to have a full-time investment professional living in NM, many new and highly qualified funds have been entering the potential investment pipeline

• Based on future guidance from the State Investment Council with regards to returns vs an economic development focus, a new pacing plan for the NMPEIP will be approved in 2018

Net capital deployed is 5.5% of the Severance Tax Permanent Fund

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Fund of Funds Program*

• $335 million of capital deployed into companies active in New Mexico by funds in the program as of March 31, 2016

• An additional $2 billion invested into New Mexico companies by outside funds participating in investment syndicates with funds in the program

Summary of Program Economic Impact in Q1 2017

* Numbers based on Sun Mountain Capital’s internal survey of NMPEIP funds and underlying companies as of 12/31/2016.

Only companies that report their data are included. If a company is sold from the NMPEIP, the most recent employment

number is used. Data is accurate to the best of Sun Mountain’s knowledge. Further, job numbers were corroborated by the

New Mexico Economic Development Department in 2015.

NMPEIP Impact Summary as of 3/31/17Total Investment in New Mexico Portfolio Companies

A) Investment by Funds with NMPEIP Participation $335,007,255B) External Investment Caused by Funds with NMPEIP Participation $2,020,978,455

Total VC Investment in NM Companies $2,211,762,616Investment Multiplier (B / A) 6.0x

Categorization of NM Portfolio CompaniesActive Companies 27 37.0%Companies Exited at a Gain 16 21.9%Companies Exited at a Loss 30 41.1%

Number of Companies funded 73 100.0%

NM Economic Impact Q1 2017NM Purchases $25,485,331NM Payroll $29,096,375NM Economic Impact $54,581,706

Total Current Full-Time Jobs 1,530Average Salary of Jobs Created $76,069Average Salary in New Mexico1 $44,160

Source: Survey of participating NMPEIP fund managers and NM companies for active companies and most recent verified data for exited companies1 Source: New Mexico wage and salary disbursements and total wage and salary employees from the U.S. Dept. of Commerce, Bureau of Economic Analysis

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73 New Mexico Companies

New Mexico Companies as of 3/31/17

Advent Solar Eclipse Aviation MIOX Skorpios Technologies

Agilvax Elisar Software Nanocrystal Southwest Med Tech

Altaview Technologies Enerpulse NanoMR Sundrop

Altela Entrada Noribachi Surfect Technologies

American Clay Exagen Diagnostics Nuvita TCI Medical

Amtech Figaro OnQueue Technologies Teucrium Trading

Aspen Avionics Growstone Patchwork Systems Tred

Avasca Holochip Phase-I TriLumina

Avisa Pharma Infantelligence POSLavu TruTouch Technologies

Azano InnovASIC Protalex VeraLight

Bioreason Intellicyt ProtoHIT Vertical Power

Boomtime Introbotics Puente Partners Vibrant

BounceChat Iosil Energy Quasar WellKeeper

Comet Solutions JackRabbit Systems Respira Therapeutics xF Technologies

Consolidated Energy Kinetisis RiskSense Zia Laser

Controlled Recovery Lumidigm SBA Materials ZTEC Instruments

Desert Power Mesofuel Seamless Medical

Dining Gift Services Metaphor Seattle Fish Company

Earthstone MicroOptical Devices Seclarity

Status Key

Active (27) Exited at a Gain (16) Exited at a Loss (30)

Note: NMPEIP participants and the SIC directly have invested in 71 New Mexico-based companies,

with 2 additional companies funded by SIC National Program participants

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Recent New Mexico Company News

A Small Sample of New Mexico Entrepreneurship In the News

• “Respira Therapeutics Announces Collaboration with United Therapeutics to Treat Pulmonary Hypertension” April 2017, prnewswire.com

• “New state Catalyst Fund announces first awards” May 2017, Albuquerque Journal

• “Trilumina Obtains $9M for Sensor, Autonomous Technology Development” May 2017, Government Technology

• “RiskSense Wins Four Golden Bridge Business and Innovation Awards” August 2017, prnewswire.com

• “Descartes Labs raises $30 million to better understand Earth with AI” August 2017, VentureBeat

Company News in Q1 2017

• Seamless Medical System – Acquired • Respira – Joint Development Agreement

• Bayotech – $2.0M raise • RiskSense – Finalized $10.0M raise

• Trilumina – $9.0M raise • SBA Materials – Ceased Operations

• Sundrop Fuels – Ceased Operations • Descartes Labs – $30.0M raise

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• Program is currently tracking to the pacing plan approved by the SIC

• We are evaluating potential new commitments for the Program

• Currently 3 funds are in advanced stages of due diligence for potential commitment from the NMPEIP

• Program financial returns are improving steadily from the 1993-2003 era

• Since 2004, NMPEIP investments have produced a positive financial return

• Program is having a positive impact on the New Mexico economy

Summary of Key Points

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Thank You for Your Time

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Capital Invested by Sector: Active NMPEIP Program Sector Concentration

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NMPEIP Status Overview and Summary of Partnership Commitments

Unaudited Performance Data as of 3/31/17

Number of Fund Commitments 35

Capital Committed (Total) $469.1

Capital Committed (Net of Dist.'s Received) $309.9

Capital Drawn $423.6

% of Capital Committed (Total) 90.3%

Distributions Received $159.2

% of Capital Drawn 37.6%

Outstanding Deployed Capital $264.4

Outstanding Deployed Capital as % of STPF 5.7%

Portfolio Carrying Value $300.2

Total Portfolio Value $459.4

% of Capital Drawn 108.5%

Portfolio Multiple of Invested Capital 1.08x

Portfolio IRR 3.7%

Note: Returns calculated using reported Carrying Values as of 3/31/17

and data provided by Invient

Severance Tax Permanent Fund ('STPF') currently $4,670.7 millionas of 3/31/17

All Fund Commitment Summary Commitment Funded Percent NM Investment Value ($) 2 Return 2Fund

as of 3/31/17 Vintage Dollars % of Fund To Date Funded Invest 1 Realized Unrealized3

Total Multiple IRR Liquidated

ARCH Venture Fund II, L.P. 1993 $1.2 3.9% $1.2 100.0% $67.1 $4.3 $0.0 $4.3 3.53x 44.8% Yes

ARCH Venture Fund III, L.P. 1996 $4.0 3.7% $4.0 100.0% $0.0 $3.8 $0.0 $3.8 0.94x -0.9% Yes

CVM Equity Fund V 1998 $3.0 50.0% $3.0 100.0% $1.1 $1.7 $0.0 $1.7 0.58x -6.1% Yes

Murphree Venture Partners IV, L.P. 1998 $4.0 38.5% $4.0 100.0% $4.9 $0.1 $0.0 $0.1 0.02x -71.8% Yes

Tullis/Dickerson Capital Focus II, L.P.41998 $5.0 4.4% $5.0 100.0% $10.1 $2.5 $1.5 $4.0 0.80x -1.7%

Valley Ventures II, L.P. 1998 $3.0 10.3% $3.0 100.0% $18.4 $2.6 $0.0 $2.6 0.87x -1.6% Yes

Vestor Partners, L.P. 1998 $2.5 4.3% $2.4 94.0% $0.0 $0.6 $0.0 $0.6 0.27x -16.4% Yes

International Venture Fund I, L.P. 2000 $5.0 30.0% $5.0 100.0% $9.6 $0.9 $0.1 $1.0 0.19x -12.2% Yes

Murphree Venture Partners V, L.P. 2000 $3.0 20.0% $3.0 100.0% $2.2 $1.0 $0.2 $1.2 0.41x -10.5% In Process

Red River Ventures, L.P. 2000 $7.2 24.4% $7.2 100.0% $12.8 $6.0 $0.0 $6.0 0.83x -2.7%

Tullis/Dickerson Capital Focus III, L.P.4

2001 $15.0 11.8% $15.0 100.0% $25.2 $13.9 $4.6 $18.5 1.23x 4.4%

Wasatch Venture Fund III, LLC 2001 $8.7 15.0% $8.6 99.0% $41.6 $4.6 $2.6 $7.2 0.84x -2.5%

Altira Technology Fund IV, L.P. 2002 $10.0 15.6% $10.0 100.0% $14.3 $14.2 $0.0 $14.2 1.42x 6.1% Yes

Blue Sage Capital, L.P. 2002 $10.0 6.9% $7.6 76.4% $10.0 $26.0 $4.1 $30.0 3.86x 21.9%

ITU Ventures West I, L.P. 2002 $15.0 45.5% $15.0 100.0% $15.3 $6.0 $0.0 $6.0 0.41x -15.5% Yes

Valley Ventures III, L.P. 2002 $6.7 15.0% $6.5 98.0% $14.9 $2.3 $0.0 $2.3 0.35x -12.0% Yes

New Mexico Co-Investment Partners, L.P.5

2003 $62.0 100.0% $62.0 100.0% $163.7 $13.3 $0.0 $13.3 0.21x -23.4% YesvSpring II, L.P.4

2003 $20.0 23.6% $20.0 100.0% $91.9 $0.0 $5.2 $5.2 0.26x -11.7%

Flywheel I, L.P. 2004 $15.0 48.6% $15.0 100.0% $52.8 $10.1 $5.7 $15.8 1.06x 0.7%

Verge I, L.P. 2004 $10.0 65.6% $10.0 100.0% $50.6 $7.3 $2.4 $9.7 0.97x -0.6%

Wasatch New Mexico Fund, LLC 2004 $12.0 99.0% $12.0 100.0% $47.0 $1.4 $2.8 $4.2 0.35x -11.7%

ITU Ventures III NM, L.P. 2005 $2.3 99.0% $2.3 100.0% $0.0 $0.1 $0.0 $0.1 0.04x -73.6% Yes

Psilos Group Partners IIIB, L.P. 2006 $15.0 99.0% $15.0 100.0% $28.8 $8.0 $11.5 $19.6 1.31x 4.6%

Village Ventures Fund II-B, L.P. 2006 $15.0 99.0% $17.5 116.6% $3.2 $14.4 $11.3 $25.6 1.47x 7.2%

NMSIC Co-Investment Fund, L.P. (Classic) 2007 $30.0 100.0% $24.0 80.0% $369.8 $7.1 $17.7 $24.8 0.84x -3.9%

NMSIC Co-Investment Fund, L.P. (Focused) 2007 $62.5 100.0% $60.7 97.0% $851.5 $1.9 $115.1 $116.9 1.86x 8.8%

vSpring III, L.P.4 2007 $15.0 11.9% $15.0 100.0% $13.2 $0.5 $13.1 $13.6 0.90x -1.4%

EPIC Venture Fund IV, LLC 2008 $10.0 17.2% $8.8 88.2% $10.0 $4.1 $12.4 $16.6 1.84x 10.8%

NMSIC Co-Investment Fund, L.P. (2013) 2013 $20.0 100.0% $17.8 88.8% $53.9 $0.3 $33.8 $34.1 1.85x 24.2%

NMSIC Co-Investment Fund, L.P. (2014) 2014 $40.0 100.0% $32.8 82.1% $0.0 $0.2 $45.7 $45.9 1.36x 0.0%

EPIC Venture Fund V, LLC 2016 $10.0 13.3% $1.0 10.0% $58.7 $0.0 $0.9 $0.9 N/M N/M

Psilos Group Partners III Subsidiary, L.P. 2016 $10.0 52.6% $0.4 4.4% $0.0 $0.0 $0.2 $0.2 N/M N/M

New Mexico Catalyst Fund, L.P. 2016 $10.0 13.3% $1.8 17.5% $0.0 $0.0 $1.4 $1.4 N/M N/M

Phoenix Venture Partners II, L.P. 2016 $2.0 44.2% $2.0 100.0% $0.0 $0.0 $3.0 $3.0 N/M N/M

Trinity Capital Fund III, L.P. 2016 $5.0 6.7% $5.0 100.0% $0.0 $0.0 $5.0 $5.0 N/M N/M

NMSIC Co-Investment Fund 2017 Tranche, L.P. 2017 $40.0 100.0% $0.0 0.0% $0.0 $0.0 $0.0 $0.0 N/M N/M

Program Totals $469.1 19.6% $423.6 90.3% $2,042.6 $159.2 $300.2 $459.4 1.08x 0.9% 12 of 35

Source: Invient reporting

Notes:

1) Includes both direct fund investments and caused to invest dollars into New Mexico companies. Sourced from Invient reporting, GP reporting and Sun Mountain Capital analysis

Variance from total external dollars in New Mexico companies due to exclusion of previously raised capital and accounting for overlapping caused to invest dollar allocations

2) Investment Values and Return calculations based upon asset values from 3/31/17

3) Fair Market Value as determined by Fund GPs under ASC 820 as of the report date

4) Firm managing the fund has changed name: Tullis/Dickerson is now called Tullis Health Investors, vSpring is now called Signal Peak Capital

5) New Mexico Co-Investment Partners, L.P. data includes one SIC direct investment for reporting purposes

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NMPEIP Carrying Value Quarter Over Quarter

NM PEIP Changes in Q4 2016 Reported Value

Early VC Later VC Buyout Total

Reported Valuation as of Q3 2016 $161.7 $127.8 $3.3 $292.8

Contributions to General Partners $5.1 $5.0 $0.0 $10.1

Distributions from General Partners $3.0 $0.0 $1.7 $4.8

Change in Value ($5.4) ($1.9) ($1.6) ($8.9)

Reported Valuation as of Q4 2016 $164.4 $131.0 $3.3 $298.8

Source: Invient reporting

NM PEIP Changes in Q1 2017 Reported Value

Early VC Later VC Buyout Total

Reported Valuation as of Q4 2016 $164.4 $131.0 $3.3 $298.8

Contributions to General Partners ($2.1) ($1.9) ($0.1) ($4.1)

Distributions from General Partners $2.1 $0.0 $0.4 $2.5

Change in Value ($0.0) $2.5 $0.5 $3.0

Reported Valuation as of Q1 2017 $164.5 $131.6 $4.1 $300.2

Source: Invient reporting

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