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CalPERS spreads wealth around

The pension fund giant selects 11 venture and private equity firms to invest $475 million into California start-ups and established companies seeking capital.

California start-ups may soon strike it rich.

Pension-fund giant CalPERS announced on Monday it selected 11 venture and private equity firms to invest $475 million into California start-ups and established companies seeking capital.

The California Public Employees? Retirement System--the nation's largest pension fund--is hoping these 11 firms will yield a tidy profit back to its members while also investing in California?s future.

Draper Fisher Jurvetson, a venture firm that focuses on technology investments, along with Guy Kawasaki?s Garage.com, were some of the companies selected from a field of 67 firms.

Draper Fisher, under its Draper Fisher Jurvetson Central fund, will invest $20 million in technology companies located in the Central Valley. The investments will center on companies seeking early rounds of funding.

Garage.com, meanwhile, received $10 million for the Garage California Entrepreneurs Fund. The fund plans to invest in high-tech and life sciences companies that are seeking first funding to launch operations. The Garage fund will make its investments in companies throughout the state.


Cash in hand
Fund Funding amount
California Embarcadero Fund $25 million
American River Ventures Fund $10 million
Silicon Valley Community Ventures Fund II $10 million
Yucaipa Corporate Initiatives Fund $200 million
Green Equity Partners CA Opportunity Fund $50 million
Levine Leichtman California Growth Partners $50 million
Opportunity Capital Partners Fund IV $25 million
Provender Opportunities Fund II $25 million
Bank of America California Community Fund $50 million
Source: CalPERS
"There are unmet needs in California's urban and rural markets, and we believe this initiative represents a golden opportunity for CalPERS and the state," said William Crist, CalPERS administration board president, in a statement. "Investments in underserved areas hold the potential to deliver superior returns for our fund and its members, while fueling the growth of jobs, businesses and stronger communities in our state."

The 11 firms were selected based on performance record, investing experience in underserved markets, California presence and how well their interests matched CalPERS.

As part of its investment strategy, CalPERS considered that 70 percent of the state's growth is expected to occur near Los Angeles, San Francisco and San Diego.

"These regions offer large labor pools, low real estate costs, excellent communications channels and underutilized infrastructure that are in close proximity to highways, ports, airports and consumer markets," said Michael Flaherman, CalPERS investment committee chairman. "These assets will provide companies significant competitive advantages in the marketplace."