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 remaining funds in authorized short/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 so communities statewide could invest their money together to earn greater returns. Today, the pool is called The Illinois Funds, and its holds approximately $9 billion in assets. The Illinois Funds' is designed to ensure the safety of principal, provide liquidity to pay obligations, and provide the highest investment return using authorized investment instruments. With the additional funds earned for communities, it provides 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, will invest in ways that attract, assist and retain quality technology-enabled businesses in Illinois. In August 2018, Treasurer Michael Frerichs announced an increase to the amount of investment capital available through ILGIF, increasing the total to approximately $1.5 billion in available investment capital 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 – Secure Choice is a retirement savings tool for workers in Illinois that do not have access to a workplace retirement savings option. 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 federally tax-advantaged savings program that enables Illinois families and individuals to save for disability-related expenses. ABLE is similar to 529 College Savings programs, in that families are allowed to set aside money for future qualified expenses, invest these funds in professionally designed savings accounts, and avoid some tax penalties on the fund.
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 named the Infrastructure Development Act, the act was proposed by Illinois Treasurer Michael W. Frerichs to address the need for investment within the State. The FIRST Fund was structured as an evergreen fund designed to allocate capital on a continuing and recurring basis, in perpetuity, to be invested with Illinois infrastructure development firms with a goal of investing in Illinois development projects.
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 be invested with in innovative financing products for Illinois residents attending Illinois universities.
Investment Policies
The Office of the Illinois Treasurer is responsible for the creation, revision, implementation, and publication of various investment policies, each relevant to a particular investment program under the purview of the Treasurer. These policies reflect statutory requirements as well as the policy and programmatic objectives of the Office of the Illinois Treasurer. As such, they provide an appropriate set of guidelines and procedures for the operation of state investment programs with regard to investment objectives, investment parameters, administrative responsibilities, contractual needs, and reporting requirements.