RALEIGH -- State Treasurer Janet Cowell is starting a $250 million equity fund to invest in North Carolina companies with two goals in mind: make money for the state pension fund and create jobs in North Carolina.
Cowell's office is scheduled next week to announce the investment firm that will manage the fund.
The legislature this year passed a law, at Cowell's request, giving her more flexibility in managing pension fund investments so she could establish the Innovation Fund. The fund is set up to invest up to $250 million in companies that have "significant operations in North Carolina," according to the request for proposals from investment firms.
Cowell's duties include management of the $60 billion state pension fund that serves state employees, retirees and teachers.
The new fund is intended not only to make money for the pension fund but also to "support the economic well-being of North Carolina," according to the request for proposals.
It is unusual for a pension fund to set up investments that are structured, even as a secondary objective, around an economic development goal for the state. In June, Florida's state retirement system launched a fund, also $250 million, dedicated to investing in technology and growth-related businesses in the Sunshine State.
Such funds are sometimes placed in the category of "social investing," said Jean-Pierre Aubry, a research associate with the Center for Retirement Research at Boston College.
"It's not a fiduciary's responsibility to be concerned with the external benefits of the investing," Aubry said. "If it's the place where you can get the best returns that's great, but your job is to ensure the funding of the pension plan."
Melissa Waller, a spokeswoman for Cowell, said she could not discuss the new fund beyond what was in the proposal request. But she did say the primary objective would be to get the best return possible.
The State Employees Association of North Carolina, which represents many of the state pension fund's members, said the pension fund should focus primarily on performance.
"SEANC wants the retirement system to be invested in whatever vehicle will yield the greatest performance for the retirees," said Ardis Watkins, the association's lobbyist. "That's our only goal, whether the companies are in North Carolina or elsewhere."
