Granholm announced the plan during her State of the State Address this week during which she declared that the young companies in which the new Michigan Invests! Fund will invest could represent the catalysts of the state’s future job growth. “Young companies that want to grow in Michigan are instead being uprooted by their investors who live in California or New York,” Granholm declared in the speech. “Michigan Invests! will give high-growth companies the investment capital they need if they grow right here.”
Combining pension fund money with contributions from other major Michigan funds will “create this win-win: pensioners and investors will get a good return on these sound investments,” the governor said. “Michigan gets cutting-edge businesses and jobs.”
One observer blasted the idea in comments to the Detroit News. Michael LaFaive, fiscal analyst at the Mackinac Center for Public Policy, called the Michigan Invests! Fund “a bad idea.”
“More than $50 billion a year gets invested across the country in these types of programs in the name of creating jobs,” LaFavie declared to the newspaper. “But there is no evidence it works.”
The New York State Common Retirement Fund has set aside $836 million – or about 8% of its total assets – for investments in state companies. In the past eight years, the fund has invested more than $271 million in 107 New York businesses.
The text of Granholm’s speech is here .