Lehman sets up $105m venture fund with New Jersey

A $105 million, New Jersey-focussed venture fund has been established by the state’s investment division along with US investment bank Lehman Brothers.

New Jersey is the latest US state to create an in-state private equity programme, with development of a $105 million venture fund in conjunction with Lehman Brothers.

Lehman will be the general partner for the New Jersey Directed Investment Fund, which will invest in private equity funds and privately owned companies that are based in, or plan to make investments in, New Jersey.

The fund is a “win-win” situation for the pension fund and the state’s economy, director of investment for New Jersey’s Department of the Treasury William Clark said in a statement.

“We can select investments that will provide the pension fund with good returns and at the same time provide needed capital to companies that will help New Jersey’s economy to grow,” Clark said.

The New Jersey Division of Investment has pension assets of $82.2 billion, making it one of the ten largest public pension funds in the nation.

The new fund is not without precedent; in-state private equity programmes have grown significantly in popularity over the past several years. In 2004 the Oregon Investment Council set up the $105 million Oregon Investment Fund to foster small businesses in the state, and New York-based firm Founder’s Equity and the New York State Common Retirement Fund set aside $20 million for investment in New York state businesses. Ohio, Massachusetts and California have similar programmes.