Pensions, Retirement and Old Age

State investment board keeps an eye on Wisconsin's tech trends

Age Canada Old Pension By Tom Still • 08/08/05

Gordon Brown has renamed the DTI the Department for Business, Enterprise and Regulatory Reform (DBERR) to reflect its focus on the reduction of red tape and a commitment to entrepreneurship. 2006 Older employees plan to keep on working Older employees are increasingly willing to work on past the traditional retirement age, according to a new survey. called 'baby boomers' have told Heydey, profit organisation set up by Age Concern, they want to work past the state pension age.

Funds Pension Madison, Wis. - Another dismal report on venture capital investing in Wisconsin has some business leaders wondering what the state must do to attract more private equity financing for its emerging companies. An interested observer in that debate could turn out to be the State of Wisconsin Investment Board.

Baby boomers in their peak savings years will fuel much of the investment boom. Saving for retirement is being made much easier by the government, favorable pension plans, such as the 401(k) and the Roth IRA. More women in the workforce also means higher incomes and more women qualifying for pensions. meaning that the recipient has the responsibility for investing the money. With such large amounts of money to invest, brokers and financial planners will be in demand to provide investment advice.

Hancock John Pension The agenda for this week's meeting of the investment board, which is the ninth largest public pension fund in the United States, includes a discussion of "Investment Opportunities in Wisconsin's Emerging Technologies." That may seem like a broad topic - and it is - but behind SWIB's interest in discussing homegrown tech investments is a sense that it could prove profitable for the fund's beneficiaries.

This latest release of Assurant Health HSA Tools addresses the trend of HSA owners using their accounts as retirement planning vehicles. %íhe tax favorability of HSAs, both on the federal level as well as in many states, makes them a great way for individuals to save for retirement, % said Kellen. %Út only makes sense to provide HSA owners with investment tools that may help grow their accounts.% >

Pension Widow With about $70 billion under management, SWIB is also the 23^rd largest public or private pension fund in the world. It invests worldwide in a wide array of funds, constantly monitoring the mix to ensure that a prudent balance is maintained. Private equity, a broad category that includes venture capital and leveraged buyouts, is one area where SWIB invests less (3 percent of total assets versus about 7 percent) than other funds in its class. And some SWIB-watchers are wondering if the board will seize the opportunity to invest more.

The findings come in the wake of the furore surrounding Lord Turner' age by 2050. Providing an example for people embarking on setting up a business, SME owners and managers are increasingly finding ways to fund their retirement, including property investment and investing in private pensions, reports smallbusiness.co.uk. Although SME owners and managers are understandable passionate about their businesses' success, David Robertson, chief executive officer at BFS advised that they " earned break".

Fund Pension In 2004, SWIB realized a 21.2 percent return on its private equity investments, about double for the fund as a whole. In California and Massachusetts, major public pension funds recently reported private equity returns ranging from about 23 to 26 percent - and those funds invest more heavily in that sector. With 520,000 members of the Wisconsin Retirement System expecting healthy returns, it only makes sense that SWIB board members and managers would train a keen eye on those trends.

3. We get out of the pile and differentiate ourselves in no more than two technologies. High tech Bio tech Life science Advanced manufacturing Ag tech Wisconsins regions need to decide what they can be best in the world at and then with measured risk align resources and energy behind it. Wisconsins regions cannot be all things to all people.its not a sustainable economic development strategy. regions in the world look at their organic strengths and say, This is our best bet and then they go for it.

Investment Pension There is another factor at work - Wisconsin's lack of recent venture capital investment. National figures through the second quarter of 2005 indicate that Wisconsin will report fewer venture capital deals and investments this year than in any year since the mid-1990s, when the last venture wave began. In part, that's a national story. The "dotcom" crash of 2000 and world events since Sept. 11, 2001, have generally reduced the number of venture capital deals - and the number of venture capitalists. Those who remain are decidedly more conservative in their outlook, and they're raising smaller, more manageable funds.

Canadian Pension Plan However, some states are doing far better than Wisconsin in attracting venture capital, and it's for reasons beyond national and world trends. For starters, Wisconsin may have more early-stage companies than "venture-ready" companies, which are more mature. Location doesn't help, as most venture capital is clustered on either coast. Then again, Minnesota, Utah and Colorado lack beachfront property, too, but they show up ahead of Wisconsin in venture rankings.

Department Pension Work Some pension funds appear to be leading the charge. In Maryland, for example, a 2004 state report recommended that its public pension fund become more aggressive in seeking out venture capital investment opportunities. If not, the report concluded, Maryland's high-tech economy would not grow at an acceptable rate. Maryland now has two state-backed venture companies that are ranked among national leaders, and the state reported $66 million in venture deals in the last quarter versus $5.6 million in Wisconsin.

Ibm Pension This is not to suggest that SWIB hasn't invested in Wisconsin venture deals before. In fact, four venture capital firms with state ties are managing SWIB dollars. The question is whether SWIB sees opportunities in other forms of private equity, perhaps coming before the venture stage.

Benefit Corporation Guaranty Wisconsin has an enviable technology base and, for the most part, the right talent. More dollars invested in the right places could help the state grow - and pay strong returns for those who invest.

Calculator Pension Tom Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.
The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.

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