Indiana's PERF To Invest More In State

August 22, 2005 ( - Indiana's Public Employees' Retirement Fund (PERF) has a plan to invest more than $500 million into venture capital, real estate, and other private-equity investments, most in the Hoosier State.

The Indianapolis Business Journal reports that the $12 billion fund in recent years had intended to invest five percent of its assets in private equity, but has thus far only committed $116 million.   To reach five percent, PERF must invest another $506 million.

Governor Mitch Daniels has appointed a new leader to the fund (see  Indiana Taps New Pension Fund Chief ) and changed the board of directors since taking office in January.   The new board believes the fund can achieve economic development for the Hoosier state while also making gains for the fund, according to the Business Journal.  

The paper reports that PERF and the Indiana State Teacher’s Retirement Fund had been banned from making risky investments since investments in the Wabash and Erie Canal almost bankrupted the funds.   While the ban limited risk, it also meant unimpressive gains from low risk investments.

The law changed in 1996 and the state began diversifying its investments in 1998.  Entrepreneurial leaders believe the PERF’s new investment plan will attract millions of dollars from out of state also and raise Indiana’s profile as a good place to invest.