North Carolina State Treasurer Janet Cowell is launching a new in-state investment fund to target innovative small to medium sized businesses. The second fund is slightly larger than the state’s previous effort which offered $232 million for investments. This vehicle comes in at $250 million, with the potential for extra from co-investments.
As with the first fund the state will be looking at two-thirds equity investments or co-investments alongside other backers. The first fund has invested in eight local companies to date.
One-third of the new fund will have a Multi-stage focus: venture, growth, buyout and mezzanine.
The North Carolina pension system which is backing the fund has approximately $90 billion in assets spread through a range of investments. The first innovation fund was launched in 2010, and so far, the eight investments from the fund have generated a 20 percent net internal rate of return for the pension system.
GCM Grosvenor, an investment firm, will manage both funds for the state.
Innovation and local investment funds are popular with state pension plans as they allow the pension systems to cover their liabilities while supporting local economic development.