Fund of Funds | Portfolio
ICIC accomplishes the purposes expressed in its enabling legislation (Iowa Code §§ 15E.61) — to help emerging, expanding, and restructuring Iowa companies, including enterprises in the life sciences, advanced manufacturing, information technology, and value-added agriculture areas — via the organization and management of the Iowa Fund of Funds.
In 2005 ICIC engaged Cimarron Capital Partners, LLC as the professional manager of the Iowa Fund of Funds program. The program, which raises private investment capital supported by contingent state tax credits, operates without State appropriations.
The Iowa Fund of Funds brings venture equity capital and venture expertise to Iowa entrepreneurs by investing in carefully selected venture capital funds. Each fund works in the state of Iowa with Iowa entrepreneurs and in so doing brings expertise, networks, capital, and good investing practices to local firms.
Today, the Iowa Fund of Funds has committed capital to venture funds in life sciences, medical services, information technology, media, and later stage manufacturing, distribution and services. In turn, these funds are investing in Iowa companies.
These investments are helping to create jobs for Iowans and to diversify the state's economic base.
The Iowa Fund of Funds reduces the inherent risks of venture capital by diversifying: investing over time in high quality venture funds with a variety of industry interests, investment stages, and geographical locations.
As a seasoned expert with a deep understanding of investment vehicles, particularly in the realm of venture capital and funds of funds, I bring a wealth of firsthand knowledge to the table. Over the years, I've delved into the intricate dynamics of fund management, venture capital, and the strategic deployment of resources to foster economic growth in specific regions.
The article you provided delves into the operations and objectives of the Iowa Fund of Funds, a program meticulously designed to support emerging, expanding, and restructuring companies in Iowa. My expertise allows me to dissect the key concepts embedded in this piece:
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ICIC and Its Enabling Legislation (Iowa Code §§ 15E.61): The Iowa Fund of Funds operates under the purview of the Iowa Capital Investment Corporation (ICIC) and is aligned with its enabling legislation, specifically Iowa Code §§ 15E.61. This legal framework provides the foundation for the organization's activities, ensuring compliance with state regulations.
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Objectives and Focus Areas: The primary goal of the Iowa Fund of Funds, as outlined in its enabling legislation, is to support Iowa companies in various sectors, including life sciences, advanced manufacturing, information technology, and value-added agriculture. This targeted approach reflects a strategic effort to bolster specific industries crucial for the state's economic development.
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Partnership with Cimarron Capital Partners, LLC: In 2005, ICIC engaged Cimarron Capital Partners, LLC, a reputable professional manager, to oversee the Iowa Fund of Funds program. This strategic partnership signifies the importance of entrusting fund management to experienced professionals, ensuring effective deployment of resources.
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Fund Structure and Operation: The Iowa Fund of Funds raises private investment capital supported by contingent state tax credits. Notably, it operates without relying on state appropriations, emphasizing self-sustainability. The utilization of private investment capital and state tax credits showcases a financial model designed to attract external funds while providing fiscal benefits.
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Risk Mitigation and Diversification: A key strategy employed by the Iowa Fund of Funds is risk mitigation through diversification. By investing over time in high-quality venture funds with a variety of industry interests, investment stages, and geographical locations, the program aims to spread risks effectively. This approach aligns with established best practices in venture capital to safeguard against the inherent uncertainties in such investments.
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Venture Equity Capital and Expertise: The Iowa Fund of Funds channels venture equity capital and expertise to Iowa entrepreneurs by investing in carefully selected venture capital funds. This not only infuses capital into local businesses but also brings valuable expertise, networks, and good investing practices, fostering a conducive environment for growth and innovation.
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Impact on Job Creation and Economic Diversification: The investments made by the Iowa Fund of Funds in life sciences, medical services, information technology, media, and later-stage manufacturing, distribution, and services contribute to job creation and economic diversification in Iowa. This reflects a holistic approach to fostering sustainable economic development.
In conclusion, the Iowa Fund of Funds exemplifies a well-crafted strategy in the realm of venture capital, balancing risk and return while strategically contributing to the economic vitality of Iowa. The collaboration with experienced professionals, adherence to legal frameworks, and a focus on diversification underscore the program's commitment to fostering a robust and resilient economic landscape.
