Investing in Minnesota businesses

A bill that would ask the State Board of Investment to invest more of its assets in Minnesota-based companies was approved by a House committee.

HF3142, sponsored by Rep. Ryan Winkler (DFL-Golden Valley), would ask the board to “attempt to ensure” that at least 1 percent of its private equity investments are in venture capital businesses with a majority of their employees in Minnesota. The bill is designed to help provide more startup capital to newer, smaller companies — particularly in high-tech fields like bioscience.

The House Biosciences and Emerging Technology Committee approved the bill Feb. 20. It now goes to the House Governmental Operations, Reform, Technology and Elections Committee. The bill has no Senate companion.

The board is responsible for managing the $63.5 billion worth of retirement funds, trust funds and cash accounts currently invested by the state. Howard Bicker, the board’s executive director, said that while it has a “pretty good record” of investing in Minnesota companies, the board’s primary mission is to make investments that yield a high rate of return, regardless of their location.

“The State Board of Investment is not really in the economic development business; we’re in the trying-to-make-money business,” he said, adding that the board never passes up an in-state investment opportunity when it’s a good deal.

Don Gerhardt, CEO of LifeScience Alley, disputed that claim, arguing that many potentially lucrative venture capital startups in Minnesota are ignored because of their small size. Calling the bill “extremely important,” he noted that other states have taken similar measures to help grow their high-tech business communities.