State of Illinois
92nd General Assembly

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 1                          HOUSE RESOLUTION

 2        WHEREAS,  The public employee pension funds  of  Illinois
 3    control billions of dollars of assets, which must be invested
 4    safely  and  carefully for the benefit of thousands of public
 5    employees in Illinois and their beneficiaries; and

 6        WHEREAS,  Venture capital  partnerships  that  invest  in
 7    small  businesses  and  other  ventures can improve a pension
 8    fund's rate of investment return and contribute significantly
 9    to the economic development of this State; and

10        WHEREAS,  It has been proposed that the portion of public
11    employee pension fund assets currently  invested  in  venture
12    capital  partnerships  could be increased without significant
13    risk to the pension funds; therefore be it

16    we  respectfully  request  the  Illinois  Economic and Fiscal
17    Commission to conduct a study of the  investment  of  pension
18    fund  assets  in venture capital partnerships by the Illinois
19    State  Board  of  Investment  and  the  pension   funds   and
20    retirement  systems  organized  under Articles 5, 6, 7, 8, 9,
21    11, 15, 16,  and  17  of  the  Illinois  Pension  Code,  with
22    emphasis on the following questions:
23             (1)  For   each   of   the   pension   funds   under
24        consideration, what percentage of the total assets of the
25        fund  are  currently  invested  directly or indirectly in
26        venture capital partnerships?
27             (2)  For each of the  venture  capital  partnerships
28        that a pension fund is currently invested in, what is the
29        name  of  the partnership and what is the location of the
30        partnership headquarters?
31             (3)  With respect to each investment  by  a  pension
32        fund  in  a venture capital partnership, what is the date
                            -2-                LRB9215291EGfg
 1        or dates of the pension board approval of the investment,
 2        what is the date or dates  during  which  the  investment
 3        occurred,  what  is  the  total investment of the pension
 4        fund, and what is  the  percentage  of  equity  and  debt
 5        interest  of  the  pension  fund  in  the venture capital
 6        partnership?
 7             (4)  With respect to the venture capital investments
 8        made by venture capital partnerships in which  a  pension
 9        fund has invested, what is:
10                  (a)  the  name  of  the enterprise in which the
11             venture capital partnership has invested;
12                  (b)  the location of the  headquarters  of  the
13             enterprise;
14                  (c)  the total capitalization of the enterprise
15             at  the  time  of  the  venture  capital partnership
16             investment;
17                  (d)  the present nature and description of  the
18             enterprise's business;
19                  (e)  the stage of development of the enterprise
20             at the time of the investment (seed, start-up, early
21             expansion,  middle  expansion,  later  expansion, or
22             transition);
23                  (f)  the economic sector or  sectors  to  which
24             the  enterprise's  business  belongs  (for  example:
25             agriculture,  financial services, or biotechnology);
26             and
27                  (g)  the  current  percentage  of  public   and
28             private ownership of the enterprise?
29             (5)  With    respect   to   each   venture   capital
30        partnership in which a pension  fund  makes  investments,
31        what   are   the  separate  numbers  and  percentages  of
32        investments made in enterprises that are headquartered in
33        Illinois?
34             (6)  For each pension fund that invests  in  venture
                            -3-                LRB9215291EGfg
 1        capital  partnerships,  what is the annual and cumulative
 2        rate of return for each separate investment in a  venture
 3        capital  partnership,  what  is  the aggregate annual and
 4        cumulative rate of return of all of the  pension  board's
 5        investments  in  venture capital partnerships, and how do
 6        these returns compare to the national averages of  annual
 7        and  cumulative  rates  of  return  for  venture  capital
 8        partnerships?
 9    and be it further

10        RESOLVED, That this study shall not include consideration
11    of  investments  by  pension funds in "fund of funds" venture
12    capital  partnerships  whose  investments   involve   limited
13    partnerships  investing in other limited partnerships; and be
14    it further

15        RESOLVED, That the results of this study be presented  to
16    the General Assembly by October 1, 2002; and be it further

17        RESOLVED,  That a copy of this resolution be delivered to
18    the Executive Director of the Illinois  Economic  and  Fiscal
19    Commission.

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