Memphis County asked to invest pension money in Epicenter venture capital fund

A Memphis nonprofit aims to tap into Memphis and Shelby County employee pension funds and invest the money in local contractors.

Epicenter has requested that some of the city and county pension money go into a new FedEx Corp. already endowed $ 10 million investment fund, city and county officials said. .

The stand-alone nonprofit was formed from the Circle of the Speaker of the Greater Memphis Chamber, which listed a new set of goals in 2014 called Lunar Missions. Epicenter’s mission is to help 1,000 entrepreneurs by 2025, including 500 newly created businesses.

The agency raised around $ 40 million and intends to pool $ 100 million for investments, said Epicenter president Leslie Lynn Smith.

Shelby County Mayor Lee Harris said Epicenter has requested $ 10 million from the county pension fund. He said the request was referred to retirement adviser Wilshire Associates for a recommendation. Spokeswoman for Memphis Mayor Jim Strickland said by email that an investment adviser had been invited to consider Epicenter’s request.

Spokeswoman for Memphis Mayor Jim Strickland said by email that an investment adviser had been invited to consider Epicenter's request.

Advisors would assess Epicenter’s management, its investment strategy and its ability to oversee a venture capital fund. It is not known when the advisers will complete their tasks.

The Memphis Municipal Pension Fund has raised more than $ 2 billion. The money was distributed among the private investment managers tasked with using their share of the money to buy healthy stocks, bonds and other assets. The county fund is evenly split among investment managers, and Harris recently sought to include Memphis-based Preserver Partners among those managers.

Harris said he was not sure what Wilshire could bring back to Epicenter’s request. In general, he said, investing some of the local pension money in new Memphis businesses that can create jobs and the tax base looks good.

Shelby County Mayor Lee Harris said Epicenter has requested $ 10 million from the county pension fund.

“It’s a good thing to invest in Memphis,” said Harris.

No investment fund currently invests exclusively in Memphis entrepreneurs. This lack of start-up money, known as venture capital, keeps many start-ups small and unable to increase sales volume to a level that can attract operating loans from mainstream banks.

Dozens of wealthy Memphis pledged money into the investment fund, bringing it to $ 40 million. Money allocated by city and county pension funds could raise the level to $ 60 million.

“Our pension funds could certainly help. They have invested in other entrepreneurial vehicles. Why not invest in our entrepreneurs? ”Said Richard Smith, director of FedEx, who is also the volunteer president of the Greater Memphis Chamber and has no connection with Leslie Lynn Smith.

A donor has tentatively agreed to replenish city and county pension funds for any money lost in the Epicenter investment fund, said Richard Smith.

Following:Memphians donates $ 40 million to help startups