Since the 1960s, the State of Wisconsin Investment Board has partnered with hundreds of Wisconsin companies to invest and grow their businesses. These range from small companies with just a handful of employees to large, multi-billion-dollar corporations.
SWIB’s Wisconsin Private Debt Portfolio has provided more than $2 billion in financing for companies headquartered, with operations in Wisconsin, or that intend to invest the proceeds in our state. While maintaining its fiduciary duty to the Wisconsin Retirement System, SWIB has found ways to invest meaningful capital directly into Wisconsin companies that not only provide market rate returns, but also lead to enhanced economic activity throughout the State. The portfolio is unique in the world of public pensions.
“There is no other public pension plan that is doing what we do,” SWIB Portfolio Manager Chris Prestigiacomo said. “We have always said that the Wisconsin Private Debt Portfolio is the portfolio that touches Wisconsin closest because we are working directly with state businesses and banks.”
Approximately 80% of SWIB’s private debt investments are in Wisconsin opportunities. The Wisconsin Private Debt Portfolio’s mandate is to make long-term senior debt and subordinated debt investments in companies through private transactions. It allows SWIB to fill a specific need by making this type of direct financing available, especially to companies unable to get the attention of large investors. SWIB often collaborates with the company’s banks and other institutional investors, providing financing that complements and is addition to the bank’s financing.
“We can provide some differentiated sources of capital that can be difficult to find elsewhere in terms of the dollar amounts or time horizon we are willing to lend,” Prestigiacomo said. “I think that is extremely important.”
Businesses that have benefited from investments by the Wisconsin Private Debt Portfolio range from the healthcare sector to the agriculture/food sector and includes companies such as Kohl’s, Jockey, Harley-Davidson, and National Guardian.
Organic Valley, the nation’s largest farmer-owned organic cooperative, is just one of the many examples that Prestigiacomo refers to when discussing the success of SWIB’s Wisconsin Private Debt Portfolio. SWIB partnered with Organic Valley and its existing bank relationships to help the La Farge-based cooperative build a new storage and distribution center in Cashton.
For Prestigiacomo, a Wisconsin native, he uses his long-term relationship and knowledge of the Wisconsin market to investigate a potential investment. “Wisconsin is a smaller market and as a result, we have been able to develop our network of relationships that over time have provided us with more opportunities,” he explained.”
The success of the Wisconsin Private Debt Portfolio and the partnerships created have caught the attention of other public pension funds. “We have had other state pension plans contact us and inquire about learning more about what we do,” Prestigiacomo said.
As other public pension funds across the country struggle with underfunding, SWIB’s Wisconsin Private Debt Portfolio continues to generate reasonable returns and build lasting relationships that benefit the WRS (which more than 632,000 current and former public employees rely on for a more secure retirement ), and the entire state.
Learn more about the Private Debt Portfolio as well as SWIB’s other Wisconsin investments.