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State of Wisconsin Investment Board creates allocation to venture capital

by Matthew Robson

  • 18 Jan 2011
  • PE

SWIB manages the investments of the mid-west state’s USD 76 billion retirement system. It is allocating USD 80 million to what it calls a Catalyst Portfolio. This will invest in a small number of top venture capital funds, which are concentrated on the East and West coasts of the US. It is hoped that the allocation will attract more venture capital to Wisconsin and ultimately promote economic development in the state. The pension fund is in the process of appointing a private equity investment consultant that will contribute towards the selection of venture funds for this allocation, with the portfolio expected to be in operation from Q2 2011. SWIB's private equity investments to date have predominantly been in buyout funds, with a small proportion invested in venture capital. It has a 6% target allocation to private equity. SWIB has been active in supporting Wisconsin venture capital since 2000, when it committed USD 45 million to in-state managers Mason Wells Biomedical Fund I and Venture Investors Early Stage Fund III. In 2002, SWIB committed USD 90 million to Baird Venture Partners and Frazier Technology Ventures (which operates an office in Madison as a result of the commitment).

Another investor, Kazakhstan-based Ordabasy Corporation, is keen to invest in Central Asian venture capital and private equity opportunities in order to diversify its business. Ordabasy, whose core operations are in oil production, will invest up to 20% of a total fund’s capital and is interested in co-investments. In 2008, the company committed to the Falah Growth Fund, which targets companies in the oil and gas, mining and construction sectors in Kazakhstan. The fund was created after a visit to Kazakhstan by the UAE’s Sheikh Khalifa in July 2008. The founders of the fund are the UAE-based International Petroleum Investment Company (IPIC) and the government of Kazakhstan.

Further information on private equity investors can be found on Preqin’s Investor Intelligence database.

 

 

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