SPRINGFIELD — Investment fund managers, tech incubator leaders and entrepreneurs interested in the $220 million Illinois Growth and Innovation Fund will meet for the first time on Monday, April 4, at the offices of 50 South Capital Advisors, Treasurer Michael Frerichs announced today.
The Illinois Growth and Innovation Fund will invest with investment firms that, in turn, will provide capital to technology businesses that seek to locate or expand in Illinois. 50 South Capital Advisors is the program administrator and will host the gathering to explain the program and answer questions.
Also that day, a new website, www.ilgif.com will debut to further share information and provide a way for entrepreneurs to pitch ideas to a wider audience searching for investment potential.
“Illinois is a tech leader, and this gathering is the next step on our path to innovation and job creation,” Frerichs said. “This project has generated a lot of excitement among diverse groups and I expect this gathering will add to the momentum.”
Investments will occur during the next three years. The investments will be spread across 15 -20 funds and no more than 15 percent of the money will be placed within the same fund. An advisory board provides guidance and transparency.
The Illinois Growth and Innovation Fund has two goals: support Illinois technology jobs and earn greater investment returns for state residents. Frerichs was flanked by business leaders at 1871 when he announced the project in January. The upcoming April meeting and website launch were part of that announcement.
Frerichs leads the effort in his role as the state’s chief investment officer. The Treasurer’s Office manages more than $25 billion on behalf of the state, local governments and families saving for college.
The state’s approach to investing is cautious with an emphasis on the preservation of capital. A typical investment time horizon is overnight to ensure liquidity. The Illinois Growth and Innovation Fund’s longer time horizon means the expectation of greater overall investment returns.
Seed money will come from existing investments that are not entangled in the state budget. The Illinois Growth and Innovation Fund is expected to attract more than $400 million in private-sector money, which will further spur interest in the Midwest tech scene in which Illinois is a leader.
The investments are made possible by 2002 legislation often referred to as Technology Development Accounts (TDA). The initial round of funding led to successful Illinois companies including SpotHero, Trunk Club, Sittercity and Diagnostic Photonics. Lawmakers in 2011 authorized a second round of TDA funding. However, previous administrations chose not to act on the authority.
TDA I created an estimated 3,900 jobs (1,200 direct and 2,700 indirect). Based on that performance metric, TDA II could create 3,600 direct jobs and thousands of indirect positions.
50 South Capital, a subsidiary of the Northern Trust Corp., was selected to administer the program following a public bidding process.
About the Illinois Treasurer
The Illinois Treasurer is the state’s chief investment officer and Frerichs is a Certified Public Finance Officer. He protects consumers by encouraging savings plans for college or trade school, increasing financial education among all ages, and removing barriers to a secure retirement. As the state’s Chief Investment Officer, he actively manages approximately $25 billion. The portfolio includes $13 billion in state funds, $7 billion in college savings plans and $5 billion on behalf of local and state governments. The investment approach is cautious to ensure the preservation of capital and returns $28 to the state for every $1 spent in operations. The Treasurer’s Office predates Illinois incorporation in 1818. Voters in 1848 chose to make it an elected office.
About 50 South Capital Advisors, LL
50 South Capital Advisors, LLC is an alternatives asset management firm designed to meet the core strategic needs of investors seeking access to private equity and hedge funds. Its highly experienced team works closely with a wide range of investors to fulfill specific investment objectives and create lasting relationships. 50 South Capital’s investment philosophy focuses on providing access primarily to small- to mid-sized managers that offer unique and differentiated sources of return. 50 South Capital is a wholly- owned subsidiary of Northern Trust Corporation. Founded in Chicago in 1889, Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals.
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