Please stay tuned for additional details on the impact of the Illinois Growth and Innovation Fund in terms of its investment performance and economic development performance on the State and its economy.
Technology Development Account I
In 2005, the first Technology Development Account (TDA I) was established, authorizing the Treasurer’s Office to allocate up to 1% of the State investment portfolio to venture capital firms located in Illinois with a goal of investing in technology businesses seeking to locate, expand or remain in Illinois.
At its core, TDA I carries a dual purpose: (i) to support the growth of Illinois technology businesses, which in turn bolsters job creation and boosts the State’s economy, and (ii) to generate positive investment returns for the State of Illinois.
TDA I utilized a fund-of-funds approach with areas of investment including emerging funds, venture capital funds, private equity funds and subordinated debt funds. Additional diversification was achieved vis-à-vis industry, investment stage and vintage diversification. As such, TDA I contained over 250 portfolio companies across eighteen recipient funds (as of June 2015).
In regard to the impact on job creation and economic growth in Illinois, TDA I has enabled venture capital firms to invest $115 million in thirty-seven Illinois companies (as of June 2015). That in turn has attracted more than $450 million in additional private investment. Companies that received TDA I investments have created approximately 2,800 direct jobs and 3,400 indirect jobs in Illinois.
While TDA I investments will continue to wind down between 2016 and 2023 (approximately), the following takeaways help underscore the performance of the program:
- Realized Gains – Since inception through June 30, 2016, the Treasurer’s Office has received distributions of $32,263,567 in capital gains and dividends.
- Internal Rate of Return – As of June 30, 2016, the total IRR of TDA I is 5.6% annualized, net of investment management fees.
- Market Value – As of June 30, 2016, the market value of the TDA I portfolio is $52,706,299.