Investment Programs
Treasurer Frerichs is the state’s Chief Investment Officer and Chief Banking Officer. He oversees an investment portfolio totaling approximately $50 billion (as of September 2021). The portfolio includes $25 billion in state funds, $16 billion in retirement and college savings plans, and $9 billion on behalf of local and state governments. These investments are spread over a variety of important programs, including, but not limited to:
State Investments – As the state’s chief investor, the Treasurer is charged with providing investment stewardship, treasury, cash management, and investment support to Illinois government agencies, boards, and commissions in a manner that provides the most advantageous solution to their individual needs. The Office of the Illinois Treasurer manages State Investments, with assets of approximately $25 billion, providing the necessary liquidity to meet the State’s daily obligations while investing the remaining funds in authorized short- and long-term investment opportunities.
College Savings Plans – The Office of the Illinois Treasurer administers two Illinois 529 College Savings Plans: Bright Start and Bright Directions. Together, these programs represent over $17.5 billion in assets. Both investment portfolios are designed as “qualified tuition programs” under Section 529 of the Internal Revenue Code. Under the Illinois 529 College Savings Plans, investments grow tax-free as long as withdrawals are used to pay for higher education expenses (e.g., tuition, fees, books, room and board).
The Illinois Funds – The Illinois General Assembly created the first local government investment pool in 1975, enabling communities statewide to invest their money together to earn greater returns. Today, the pool is called The Illinois Funds, and it holds approximately $9 billion in assets. The Illinois Funds are designed to ensure the safety of principal, provide liquidity to pay obligations, and deliver the highest investment returns using authorized investment instruments. The additional funds earned for communities provide more support, services, and stability for local families.
Illinois Growth and Innovation Fund – The Illinois Growth and Innovation Fund (ILGIF) is an evergreen impact investment fund that invests in ways that attract, assist, and retain quality technology-enabled businesses in Illinois. In August 2018, Treasurer Michael Frerichs announced an increase in the amount of investment capital available through ILGIF, bringing the total to approximately $1.5 billion over 10 years from the State’s existing investment portfolio. Furthermore, ILGIF was structured as an evergreen fund designed to allocate capital on a continuing and recurring basis, in perpetuity, to be invested with Illinois venture capital, growth equity, and private venture debt investment firms with a goal of investing in tech-enabled businesses seeking to locate, expand, or remain in Illinois.
Secure Choice Retirement Savings Program – a retirement savings program for Illinois workers who do not have access to a workplace retirement plan. An estimated 1.2 million workers will gain access to employer-based retirement savings plans through Secure Choice.
IL ABLE – The Illinois Achieving a Better Life Experience (ABLE) Program is a special savings program that helps people with disabilities—and their families—save for disability-related expenses. It offers federal tax advantages, which means your savings can grow with certain tax benefits. ABLE accounts work a lot like a 529 college savings plan. You can set money aside for future qualified expenses, choose from professionally managed investment options, and withdraw the money for eligible costs with tax benefits.
FIRST Fund – The FIRST Fund is a first-of-its-kind, $1.5 billion impact investment fund dedicated to building and strengthening Illinois’ infrastructure and real estate. Legally known as the Infrastructure Development Act, the act was proposed by Illinois Treasurer Michael W. Frerichs to address the need for investment in the State. The FIRST Fund is designed as an evergreen fund, meaning it can invest again and again over time. It allocates capital on an ongoing basis to Illinois-based infrastructure development firms to support development projects across Illinois.
Student Empowerment Fund (SEF) – The Student Empowerment Fund is a $1.5 billion evergreen impact investment fund dedicated to investing in opportunities to provide affordable and responsible education financing products to Illinois residents. The Student Empowerment Fund was structured as an evergreen fund, designed to allocate capital on a continuing and recurring basis, in perpetuity, to invest in innovative financing products for Illinois residents attending Illinois universities.
Investment Policies
The Office of the Illinois Treasurer is responsible for creating, revising, implementing, and publishing various investment policies, each applicable to a particular investment program under the Treasurer’s purview. These policies reflect statutory requirements as well as the Office of the Illinois Treasurer’s policy and programmatic objectives. As such, they provide an appropriate set of guidelines and procedures for the operation of state investment programs, covering investment objectives, investment parameters, administrative responsibilities, contractual needs, and reporting requirements.