Wisconsin Venture Capital
The Wisconsin Private Equity Program is primarily focused on venture capital partnerships active in Wisconsin and the Midwest. The program is an outgrowth of SWIB’s broader interest in private equity funds that began in the mid-1980s.
SWIB’s primary objective for investing in early stage start-up companies through its Wisconsin Venture Capital Portfolio is to generate good investment returns for the beneficiaries of the WRS on a risk-adjusted basis. A secondary benefit, many times, comes from potential jobs these investments can create.
While investment returns and regional economic enhancement are important, just as important with many of these investment opportunities is how the technologies created at the start-up companies can change the lives of people. According to a report from the Wisconsin Technology Council, SWIB is Wisconsin’s largest investor in the venture capital asset class.
Targeting Venture Capital Investments
Private equity consists of equity securities in companies not publicly traded on a stock exchange. These investments carry higher risks than publicly traded investments but offer the potential for a higher rate of return. Venture capital is one form of private equity investment. The Wisconsin Venture Capital Portfolio, which began in 1999, targets venture capital investments in Wisconsin. In 2016, the Non-Wisconsin Venture Capital Portfolio was created to target investments on a global basis in limited partnership or other fund vehicles, through strategic partnerships, or as co-investments in venture-backed companies. Active funds allocated to the Wisconsin Venture Capital Portfolio are committed to 12 venture capital funds as of June 30, 2020. The portfolio also has active direct investments in nine Wisconsin venture stage companies. As of June 30, 2020, the Wisconsin Venture Capital Portfolio had over $300 million committed/ invested in funds and directly into companies.
The portfolio capitalizes on the imbalance between the high amount of research and development in the Wisconsin region, entrepreneurial talent, low cost to operate a business within the state, and relatively low amount of venture capital dollars seeking investments here.
4490 Ventures
The State of Wisconsin Investment Board and Wisconsin Alumni Research Foundation have created an early-stage venture capital fund focused on information technology. Called 4490 Ventures, a reference to the 44ᴼ N latitude and 90ᴼ W longitude lines that approximate the center of the state of Wisconsin, the $30 million fund will focus on early-stage companies primarily in Wisconsin. The private fund, capitalized jointly by SWIB and WARF, is intended to generate attractive returns and build value for state retirement fund participants and WARF’s primary beneficiary, the University of Wisconsin–Madison. Click here to read more about 4490 Ventures.