Perry plan would aid university-bred firms

Gov. Rick Perry's staff has written a draft plan for state pensions and endowments to invest in startup companies that are based on university research.

If enacted, the plan would be a major shift in strategy for public funds in Texas, which have generally shunned targeted investments based on narrow economic or social interests.

The idea for public fund investment came in a November memorandum that urged the creation of a statewide commercialization institute to help build businesses from campus research. The institute would supplement existing efforts by university systems to commercialize their technology.

The memo by Alan Kirchhoff, an official in the governor's economic development and tourism division, says university-bred startups need to attract more interest from venture capitalists and other investors such as pension funds.

The draft proposes that three public funds - the pension funds for public school workers and state employees, and the University of Texas Investment Management Co., which manages endowments for the UT and A&M systems - consider investing in university-bred startups as part of a larger effort to commercialize technology.

Together, the funds manage more than $160 billion in assets; the largest, the Teacher Retirement System of Texas, manages $115 billion.

"The State, including university endowments and funds, and the State economy and the people of Texas would be winners," the memo says. The memo was one of hundreds of documents generated by the governor's office that open-government activist John Washburn has posted online in recent days. Washburn is a computer consultant who lives near Milwaukee.

The Teacher Retirement System rejected a similar effort by Perry's office in late 2006. A Perry staff member had asked the retirement system to consider investing up to $600 million in companies that have received money from the state's Emerging Technology Fund, a pet project of the governor's. The tech fund awards grants to companies in emerging industries such as nanotechnology and life sciences.

Teachers groups and some trustees of the retirement system criticized Perry's 2006 proposal as one that could lead to political influence on investment decisions.

Allison Castle, a spokeswoman for Perry, said Kirchhoff's memo was a draft of a proposal to be sent to legislative leaders. No final proposal has been written or distributed yet, she said Monday.

"We're still in the concept phase with this," she said.

Despite their size and research budgets, Texas schools have lagged other states by most measures of commercialization.

"Commercialization is something the governor obviously feels is important," Castle said. "It's something that will help Texas remain competitive."

The memo, she said, describes what could be "a one-stop shop, essentially," to help find investors and a market for faculty inventions.

The teacher and state worker pension funds, as well as the UT investment company, said Monday that they have not been sent the draft memo or briefed on the proposal.

"We look to judge each investment proposal on its economic merits," said Bruce Zimmerman, the CEO and chief investment officer for the UT investment company.

relder@statesman.com; 445-3671