Maryland State Retirement & Pension System, Baltimore, issued a request for information for program administrators and investment managers for a discretionary in-state private equity and venture capital program.
A law was signed by Gov. Larry Hogan in May to establish the program. It would be aimed at increasing risk capital available to firms based in or operating in the state, with 50% to be invested in commercializing technology sponsored or created by state universities, public or private. The program officials would work with the Maryland Technology Development Corp. or a similar entity.
The program would be funded by any excess state contributions to the $45 billion retirement system, so funding levels will vary each year. The fiscal year 2017 state budget allows $25 million for the program, but “additional amounts may or may not added in subsequent years,” the RFI said.
The potential services include portfolio construction, portfolio monitoring, portfolio management, financial reporting and quarterly meetings with the pension fund’s staff.
The pension fund may choose one or more firms to provide all or some of the services, “or may determine not to choose any firms,” the RFI said. Interested firms are encouraged to use minority business enterprises.
The contract is scheduled to start Jan. 1, 2017, and is expected to last 10 years, with the option for two, one-year renewals at the pension fund’s discretion.
According to a memo from the Maryland Department of Legislative Services, the pension system’s former venture capital trust launched in 1992 to invest in Maryland companies is no longer operational. While there are no performance data available, “the trust is generally viewed as having performed poorly,” the memo said.
The RFI is available on a state procurement website. Responses to the RFI are due Nov. 10 by 4 p.m. EST.
Pension system spokesman Michael Golden did not have additional details.