SWIB announces $40 million in new investments

Jeff Richgels  —  8/16/2008 1:43 pm

The State of Wisconsin Investment Board announced $40 million in new investments that will mean the entire $200 million allocated to the Wisconsin Venture Capital initiative will be fully committed.

"We continue to believe that there are attractive venture capital investments here in Wisconsin and the Midwest and are very excited about the opportunities ahead," Chris Prestigiacomo, SWIB's portfolio manager, said in a statement. "The local venture capital environment continues to evolve with the quality of startups in Wisconsin and the Midwest being some of the best in United States."

SWIB said in a news release that it will invest $25 million in Baird Venture Partners Fund III. Baird Venture Partners, a venture capital group affiliated with Milwaukee-based Robert W. Baird & Co., focuses on early- and expansion-stage companies in the healthcare/life science and business services sectors.

In addition, $15 million will be used for direct co-investments in portfolio companies in Wisconsin that have been financed or will be financed by partnership funds SWIB has invested in over the past nine years.

"Baird's new fund is a great opportunity to continue supporting Wisconsin venture capital funds and to build on an existing relationship," Keith Bozarth, SWIB executive director, said in a statement.

"The local nature of venture capital investments and the particular strategy of this fund make it clear they will focus on opportunities in Wisconsin and the Midwest," Prestigiacomo said. "Baird has generated attractive returns by executing on its focused strategy and has formed a strong investment team of experienced venture capital professionals."

SWIB has invested in four venture capital partnerships. The first initiative was approved in April 1999 with a proposal to invest up to $50 million in nonpublic healthcare and biotechnology companies in Wisconsin and the Midwest. Out of the $50 million, $45 million was allocated to Mason Wells Biomedical Fund I in Milwaukee and Venture Investors Early Stage Fund III, based in Madison.

The second initiative, approved in 2002, was to invest up to $100 million in venture capital funds active in Wisconsin. The investment focus was extended to all emerging technologies. In April, 2003, a total of $90 million was allocated to Baird Venture Partners Fund I (B) and Frazier Technology Ventures II, a Seattle-based fund with a Madison office.

In December 2005, an investment of up to $50 million in nonpublic healthcare, biotechnology and emerging technologies located in Wisconsin and the Midwest was approved. Out of the $50 million, $30 million, including a side-by-side commitment, was allocated to Venture Investors Early Stage Fund IV.

"The support structure for early start-up companies is far better today compared to when we first started investing regionally in 1999," said Prestigiacomo. "We feel the future is bright given what has taken place over the past nine years and expect to be able to capitalize on that."

The $200 million is just a fraction of the $87 billion in assets SWIB manages. This includes the nearly $80 billion in trust funds of the Wisconsin Retirement System (WRS), which provides benefits to over 550,000 current or former employees of state agencies, the university system, school districts and most local governments. The WRS is the 9th largest U.S. public pension fund and the 22nd largest public or private pension fund in the world.

Jeff Richgels  —  8/16/2008 1:43 pm