The Colorado Public Employees Retirement Association (PERA) has defined a strategy where they will invest in venture capital or private equity linked to Colorado. They have just issued an RFP for a private equity manager to run $25 million to $50 million in an in-state investment fund. PERA has $38.3 billion in its defined benefit plan, with 9%, or 43,4 billion allocated to “alternative investments” such as venture capital.
PERA Sees the Light
This is great news for the innovative Colorado startups, LLCs, S Corps and C Corps out there who are looking for an injection of capital. It is also great that our state’s largest pension fund (and 21st largest in the U.S.) is seeking some homegrown businesses to return dollars back in to Colorado. Although this strategy of setting aside money for Colorado companies is new for PERA, funding will come from cash within the existing alternatives budget.
- Interested firms must demonstrate that the principal operations of the fund would be in the state or have a substantial connection to the state
- Acceptable private equity or private market debt-oriented investment strategies include a mix of partnership interests, direct portfolio investments, co-investments and specialized fund-of-funds investments
Venture a Guess in Colorado
Some parts of Colorado have suffered a bit of a venture capital drought in recent years. Colorado Springs has seen no venture funding in 3 years. However, other areas, such as Boulder, are technology hotbeds, spurred by their support of startup incubators and organizations. Biotechs in Colorado have also seen a few million from venture capitalists recently, and cleantech pulled in $363.3 million for the state in 2011. Hopefully, this move by PERA will continue to bring both attention and innovation to Colorado corporations and spark business formation in right here at home.
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