Invest the funds of the core retirement investment trust in loans, securities, or investments in addition to those permitted by any other statute including investments in corporations or limited liability companies which are in the venture capital stage. The aggregate of the loans, securities, and investments made under this subsection shall not exceed 15 percent of the admitted assets of that trust. Investments in corporations or limited liability companies which are in the venture capital stage shall not exceed 2 percent of the admitted assets of that trust.
The limitations upon the percentage of the assets of any fund that are imposed by sub. (4)
or any other statute shall not be applicable to investments made by the board of funds in the variable retirement investment trust created under s. 40.04 (3)
and those investments shall be excluded in computing the assets to which the limitations imposed by sub. (4)
apply. Assets of the variable retirement investment trust shall be invested primarily in equity securities that shall include common stocks, real estate or other recognized forms of equities whether or not subject to indebtedness, including securities convertible into common stocks and securities of corporations in the venture capital stage. The board may, however, temporarily invest assets of the variable retirement investment trust in investments that are authorized under sub. (3)
, but the assets so temporarily invested shall be replaced by equity securities at the earliest time considered by the board to be practicable considering the then existing condition of the securities market and other influential factors. Investments in securities of corporations that are in the venture capital stage shall not exceed 2 percent of the admitted assets of the variable retirement investment trust.
Notwithstanding any other statute, transfers from the variable retirement investment trust to the core retirement investment trust under s. 40.04 (7)
may be made in cash or securities or both as determined by the board. The board shall determine market values for securities in the variable retirement investment trust as of the close of business on the last working day preceding a transfer. If securities are transferred, to the extent determined feasible by the board, a proportionate amount of all securities in even hundreds of shares of stock or even thousands of par value of bonds in the variable retirement investment trust shall be transferred. The board may hold or sell the transferred securities as it determines appropriate considering market and economic conditions. Any limitation on the percentage of assets in common stocks or in the stock of one company does not apply to the transferred securities, except the board shall, at such time as it determines that market, economic and other conditions are appropriate to the sale of the securities, sell sufficient transferred securities so as to comply with percentage of asset limitations.
Make all loans and investment purchases from any funds under its control in the name of the board, except that:
Mortgages on real estate outside of this state may be made to, and the title to real estate outside of this state may be acquired in the name of, a trustee under a trust agreement between the board and a bank, credit union, savings and loan association, savings bank or trust company organized under the laws of the United States or any state having a combined capital and surplus of at least $25,000,000; and any such mortgages or real estate acquired prior to June 24, 1966, may be assigned or conveyed to the trustee under an appropriate trust agreement between it and the board.
Loans, securities and investments may be purchased or held in the name of, or transferred to nominees of one or more banks or trust companies meeting the requirements of this section under a custodial agreement between the board and each such bank or trust company. Any such bank or trust company shall be organized under the laws of the United States or any state thereof and any such bank or trust company not located in Wisconsin shall have a combined capital surplus and undivided profits of at least $100,000,000. Foreign loans, securities and investments may be purchased or held in the name of, or transferred to nominees of, foreign sub-custodians of any such bank or trust company.
Accept, when necessary to protect a mortgage loan, a quitclaim deed or warranty deed to the mortgaged property in full satisfaction of the mortgage debt, and manage, operate, lease, exchange, sell and convey, by land contract, quitclaim deed or warranty deed, and grant easement rights in, any real property acquired by the board.
Give advice and assistance requested by the board of commissioners of public lands or the board of regents of the University of Wisconsin System concerning the investment of any moneys that under sub. (1)
are excepted from the moneys to be loaned or invested by the investment board, and assign, sell, convey and deed to the board of commissioners of public lands or the board of regents of the University of Wisconsin System any investments made by the investment board as may be mutually agreeable. The cost of any services rendered to the board of regents of the University of Wisconsin System under this section shall be charged to the fund to which the moneys invested belong and shall be added to the appropriation to the investment board in s. 20.536
If contracted to do so by the Board of Regents of the University of Wisconsin System, invest the moneys specified in s. 36.11 (11m)
in accordance with the terms of the contract and the board's standard of responsibility specified in s. 25.15 (2)
If a building constitutes any part of the security for a loan made by the board under sub. (3) (bh)
or s. 620.22 (2)
, the building shall be kept insured for at least the unpaid amount of the loan or any larger amount that may be necessary to comply with any coinsurance clause inserted in or attached to the policy. When the full insurable value of the building is less than the unpaid amount of the loan, the building shall be kept insured for the full insurable value of the building.
In order to promptly process investment transactions and receipts, have authority to establish and maintain accounts in its own name in those banks, savings and loan associations, savings banks and credit unions with which the board has entered into custodial agreements.
Succeed to all of the duties, functions, and powers, property, documents, records, assets, liabilities and obligations of:
The commissioner of insurance in the investment of the state insurance fund;
The commissioner of insurance, the state treasurer, the secretary of state and the attorney general in the investment of the life fund;
The state treasurer, the secretary of state and the attorney general in the investment of the soldiers' rehabilitation fund;
All other state boards, commissions, departments, institutions and officers in the investment of any funds that under sub. (1)
are to be loaned and invested by the board.
Succeed to all of the property, documents, records and assets of the state annuity and investment board in the investment of the several funds that were under the control of the state annuity and investment board.
No later than 45 days after the end of each calendar quarter, submit a report to the department of administration, the cochairpersons of the joint legislative audit committee, and the cochairpersons of the joint committee on finance that identifies all of the following:
All costs and expenses charged to funds during that calendar quarter, including a breakdown of the amount and percentage of assets managed under each type of dedicated and commingled account or partnership, and the change in the amount and percentage from the prior calendar quarter.
All operating expenditures during that calendar quarter.
The number of full-time equivalent positions created or abolished by the board under s. 16.505 (2g)
during that calendar quarter.
Appear before the joint committee on finance, by the board's executive director or by board personnel designated by the executive director, at the committee's first quarterly meeting under s. 13.10
in each fiscal year to provide an update, for the current fiscal year and the succeeding fiscal year, of the board's completed or projected operating budget changes, position authorization changes, assessment of the funds under management, and performance of the funds under management.
As of December 31 of each year, make and file with the department of employee trust funds a report of the value of the assets of the core retirement investment trust and of the variable retirement investment trust, determined as of that date at market value for the variable retirement investment trust and on the following basis for the core retirement investment trust:
Bonds and other evidences of debt and loans secured by mortgages having a fixed term and rate shall be valued at market value, except that if the board determines that a market value cannot readily be determined for any item, the item shall be valued at the outstanding principal balance.
Preferred stocks shall be valued at current market value, but if no current market exists shall be valued at par.
Real property that is leased to others shall be valued at market value, except that if the board determines that the market value cannot readily be assigned, the real property shall be valued at cost.
Any preferred stock, bond, or mortgage that is in arrears or in default shall be assigned a value by the board that will approximate what the board in its sole discretion feels the asset is worth.
All other investments shall be valued at market.
With respect to all securities under pars. (a)
, the amount of any income or any adjustment in income shall be transferred to the current income account of the core retirement investment trust under s. 40.04 (3)
Annually, on or before March 31, submit to the joint legislative audit committee, to the joint committee on finance and to the chief clerk of each house, for distribution to the appropriate standing committees under s. 13.172 (3)
, a report including all of the following:
A description of the board's annual investment goals and long-term investment strategies, including any changes in the goals and strategies from those in the previous year.
An assessment of the board's progress in meeting its annual investment goals.
Information on the types of investments held by the board, including the market values of the investments and the degree of risk associated with the investments, the board's use of derivatives, as defined in s. 25.183 (1) (a)
, any ventures by the board into new markets, any use of new investment instruments by the board and a comparison of the investment performance of the board to that achieved by a peer group of public and private entities that invest similar-sized funds.
A discussion of the amounts and categories of investments made within the state, including the amounts and categories of investments described, and progress in meeting the objectives of the plan submitted, under sub. (70)
Upon adopting any change in the board's investment policies or guidelines, submit to the joint legislative audit committee, to the joint committee on finance and to the chief clerk of each house, for distribution to the appropriate standing committees under s. 13.172 (3)
, a report summarizing the change in the investment policies or guidelines.
For purposes of the power and authority of the board to make investments, the “admitted assets" of the core retirement investment trust or the variable retirement investment trust shall be the total valuation of the assets of such trust as set forth in the last report made under sub. (14)
No later than January 31 annually, submit a report to the joint committee on finance concerning the amount of credits generated by the board with brokerage firms during the preceding calendar year. The report shall contain a separate itemization of the amount of directed credits for services to be provided by the firm providing the credit and 3rd-party credits for services to be provided by any firm. The report shall include information regarding utilization of 3rd-party credits by the board.
Annually, have the legislative audit bureau conduct a financial audit, including an assessment of the fair presentation of the financial statements and an evaluation of the internal control structure of the board. As part of the financial audit, the legislative audit bureau shall identify certain statutes and policies and guidelines adopted by the board and shall determine the extent of compliance by the board with the statutes, policies and guidelines. The board shall reimburse the legislative audit bureau for the cost of audits required to be performed under this subsection.
Biennially, have the legislative audit bureau conduct a performance evaluation audit that includes an audit of the board's policies and management practices. The board shall reimburse the legislative audit bureau for the cost of audits required to be performed under this subsection.
Maintain records from which it can determine the particular investments of the sinking funds of the bond security and redemption fund made under sub. (3) (dr)
and the fair market value of such investments, and report this information to the department of administration at its request.
Designate special depositories in which the secretary of administration or the state treasurer may make special deposits of funds, not exceeding the amount limited by the board, which shall be deposited subject to the depository's rules and regulations relative to either savings accounts, time certificates of deposit, or open time accounts, as the case may be.
Invest the industrial building construction loan fund under sub. (1) (hm)
only on the basis specified in sub. (3) (b)
No later than December 31 of every even-numbered year, submit to the governor and to the presiding officer of each house of the legislature a plan for making investments in this state. The purpose of the plan is to encourage the board to make the maximum amount of investments in this state, subject to s. 25.15
and consistent with the statutory purpose of each trust or fund managed by the board. The plan shall discuss potential investments to be made during the succeeding 5 years beginning in the year after submittal of the plan, and shall include, but not be limited to, the following:
Nonbinding management objectives for each year stated, as appropriate, as a dollar amount or as a percentage of the total amount of all investments made by the board, for the following:
The number and value of holdings of securities of entities headquartered or primarily located in this state.
The number and value of holdings of securities of entities with significant employment in this state.
The number and value of investments to be made annually in companies that are reasonably likely to use the moneys invested by the board to maintain or expand employment in this state. Such investments may include any of the following:
Loans to corporations and other organizations to maintain or expand operations in this state.
Purchases of new equity offerings by companies whose equities are not broadly traded on major exchanges, if the proceeds are to be used to maintain or expand operations in this state.
Purchases of certificates of deposit or similar instruments issued by financial institutions with substantial operations in this state.
Investments in venture capital firms based in other states, if those investments are to be used to purchase securities in companies located in this state.
Investments in businesses headquartered in this state that have less than 500 employees.
Other investments that the board determines will result in maintenance or expansion of employment in this state.
Recommended actions to help the board meet its management objectives. The actions may include preparing and distributing informational materials, soliciting and reviewing proposals from venture capital investment firms located within or outside this state for investments in businesses in this state and soliciting investment proposals from businesses in this state.
Comments solicited from the chief executive officer of the Wisconsin Economic Development Corporation and received by the board on or before November 30 of the year of submittal.
Before June 30, 2004, make an effort to commit to invest an amount not less than $50,000,000 in venture capital investment firms. The amount that is committed to be invested under this paragraph shall be in addition to any amount that is invested in venture capital investment firms before July 30, 2002. In selecting the venture capital investment firms in which to make investments, the board is subject to the standard of responsibility under s. 25.15 (2)
and shall consider all of the following factors:
The experience of the venture capital investment firms in making investments.
The commitment of the venture capital investment firms to making venture capital investments in health care, biotechnology, and other technological industries.
The willingness of the venture capital investment firms to make at least 75 percent of the investments in businesses headquartered in this state.
Whether the venture capital investment firms have a place of business in this state.
The overall experience of the venture capital investment firms in making investments in businesses that are in the venture capital stage.
The relationships that the venture capital investment firms have with technology transfer organizations, such as the Wisconsin Alumni Research Foundation, Inc.
The ability of the venture capital investment firms to do lead and follow-on investments.
Nothing in this subsection limits the authority of the board to make any other investments that are otherwise authorized by law or restricts the authority of the board or any venture capital investment firm to make investments in any area of this state.
History: 1971 c. 41
; 1971 c. 74
; 1971 c. 100
; 1971 c. 125
s. 522 (1)
; 1971 c. 164
; 1971 c. 214
; 1971 c. 260
s. 92 (3)
to (5); 1973 c. 117
; 1973 c. 208
; 1973 c. 209
; 1975 c. 26
; 1977 c. 29
, 1654 (1)
; 1977 c. 31
; 1979 c. 32
; 1979 c. 34
, 2102 (56) (a)
; 1979 c. 102
; 1979 c. 109
; 1979 c. 221
; 1979 c. 318
; 1979 c. 361
; 1981 c. 20
; 1981 c. 96
; 1981 c. 169
; 1983 a. 27
; 1983 a. 36
, 96 (4)
; 1983 a. 81
; 1983 a. 83
; 1983 a. 142
; 1985 a. 25
; 1985 a. 332
s. 251 (1)
; 1987 a. 27
; 1989 a. 13
; 1991 a. 32
; 1993 a. 16
; 1995 a. 27
, 9116 (5)
; 1995 a. 56
; 1997 a. 27
; 1999 a. 9
; 2001 a. 7
; 2003 a. 33
; 2005 a. 1
; 2007 a. 20
; 2009 a. 2
; 2011 a. 32
; 2013 a. 20
; 2013 a. 36
; 2013 a. 41
; 2015 a. 55
; 2015 a. 197
; 2015 a. 334
; 2017 a. 59
; 2019 a. 9
; s. 35.17 correction in (10).
The investment board is an independent going concern not protected by sovereign immunity. Bahr v. State v. Investment Board, 186 Wis. 2d 379
, 521 N.W.2d 152
(Ct. App. 1994).
The commingling of common stocks of various employee trust funds is not prohibited by sub. (3) (f). 59 Atty. Gen. 149.
The investment board may not, without authorization from the legislature, engage in “put" and “call" options on its stock portfolio. 60 Atty. Gen. 266.
The investment board has authority, under sub. (8), to contribute to a private improvement association for street improvements, if the improvements will directly benefit the board's property. 65 Atty. Gen. 85.
The investment board lacks authority to borrow money and secure that debt utilizing real estate owned by it as an asset of the fixed retirement trust. The board has authority to acquire encumbered real estate if the debt is assumed without recourse. 78 Atty. Gen. 189
The Investment Board has the power to make investments that meet the standard of prudence under s. 25.15 (2), even if those investments are not specifically listed in ch. 25. Prior to making investments other than the types enumerated in ch. 25, the board is not required to make a threshold finding that investing solely in the “legal list" would not meet the standard of prudence. The statutory standard for prudence remains the same whether the board is investing in an enumerated investment, or one that is not enumerated. Because the standard of prudence, however, takes into account the trustees' powers to manage the funds, the board's expanded powers are a relevant factor in evaluating whether the board has met that standard. OAG 11-08
Additional powers of board. 25.18(1)(1)
In addition to the powers and duties enumerated in s. 25.17
, but subject to s. 25.183
, the board may:
Notwithstanding s. 20.930
and all provisions of subch. IV of ch. 16
, except s. 16.753
, employ special legal or investment counsel in any matters arising out of the scope of its investment authority. Section 16.753
does not apply to the employment of legal or investment counsel for the purpose of assisting the board with investments. The employment of special legal counsel shall be with the advice and consent of the attorney general whenever such special counsel is to be compensated by the board. Any expense of counsel so employed shall be borne by the fund for which the services shall be furnished.
Execute instruments in which it agrees to indemnify against its failure to endorse payments of any kind which may be made upon notes, bonds, debentures or other securities or to indemnify the issuer of securities, whether it be the obligor thereon or a trustee or agent, against any loss which might be incurred as the result of the issuance or reissuance of securities to replace securities which have been lost, stolen, mutilated or destroyed.
Secure insurance against burglary, robbery, theft or any other risks relating to any of the securities, properties or other investments owned or held by the board or any of the funds or trusts under its management. The board shall pay the costs of such insurance from the current income of the funds or trusts benefiting from the insurance.
Liquidate or cause to be liquidated any corporation 100 percent of whose common stock is owned by the board, or operate such corporation until it can be liquidated to recoup the investment of the board, but such period shall not exceed 5 years.
Take such action as may be necessary to make investments in mortgage loans or in the purchase of interests in real estate in any other state or in Canada, including but not excluding because of enumeration, qualifying to do business, filing reports, paying franchise, license or other fees and taxes, designating agents, designating an office and subjecting itself to suit.
Maintain and repair any building or other structure or premises which it owns in fee or in which it owns the beneficial interest and, notwithstanding all provisions of subch. IV
or V of ch. 16
, except s. 16.753
, it shall have exclusive authority to make such agreements and enter into such contracts as it deems necessary for such purpose. Section 16.753
does not apply to agreements and contracts entered into by the board for the purpose of assisting the board with investments. All noncapital costs under this paragraph shall be charged to the current income accounts of the funds having an interest in the building, structure or premises.
Engage in financial transactions whereby bearer securities issued or guaranteed by the federal government or any of its agencies, which are owned by the board, are delivered to reputable and financially responsible dealers in the securities under an agreement which provides:
For the replacement of the securities with securities of the same kind and amount upon demand by the board;
For the payment to the board by the dealer of a commission, based upon the amount of the securities, for the period of time between the delivery of the securities to the dealer and the dealer's replacement of the securities; and
For the pledge and delivery by the dealer to the board of other securities issued or guaranteed by the federal government or any of its agencies, having a market value at the time of the pledge equal to at least the market value of the delivered securities, to guarantee the replacement of the securities.
Sell stock, debentures or other securities which it has the right to acquire upon the exercise of conversion rights then owned by it.
Engage in financial transactions whereby securities owned by the board, are delivered to reputable and financially responsible dealers under an agreement satisfactory to the board which provides for cash equal to the full current market value of the security as adjusted from time to time to changes in the market, and for replacement thereof with securities of the kind and amount upon demand by the board.