Three days after Gov. Martin O'Malley announced a $1.1 billion initiative for the biotechnology industry, Comptroller Peter Franchot announced yesterday that he would advocate that the state pension fund to invest about $1 billion in life sciences and "green" technology such as renewable energy and environmentally sensitive building materials.
Franchot, who is vice chairman of the Maryland State Retirement and Pension System, said he would recommend that about $500 million be invested in the biotechnology industry, particularly in Maryland. He said that such a significant investment by the $38 billion pension fund for state employees, law enforcement officers and lawmakers would provide a good return while producing jobs in the state and sending the message to biotechnology ventures.
"We're serious in Maryland about growing and supporting the industry," Franchot said.
While the announcements by Franchot and O'Malley this week come as both attend a biotechnology conference in San Diego, the proclamations of support were not coordinated. In fact, their apparent agreement that the state needs to foster the industry - and Franchot's pledge to back O'Malley's initiative - represents a rare instance of accord between the political rivals.
Meanwhile, O'Malley trumpeted the fact that Maryland moved up in a nationwide ranking of states seeking to become technology incubators. Maryland bumped off California for the spot behind top-rated Massachusetts, according to the Milken Institute, a Santa Monica, Calif.-based think tank that tracks how well states are positioned to foster innovation. Maryland is among several states racing to attract the growing biotech industry.
The funding proposed by O'Malley, a Democrat, would build on existing tax credits and grant programs and be used to create a biotechnology center, finance capital projects and make equity investments in start-up companies.
Franchot also proposes investing about $500 million in "green" technology. Treasurer Nancy K. Kopp said money managers need to be sensitive to the impacts of global climate change on the economy and tailor investments accordingly.
The total $1 billion investment would represent about 2.5 percent of the pension system's assets.
R. Dean Kenderdine, executive director of the pension system, said that his office has agreed to research investment possibilities in biotech and "green" technology but that he had not heard of a dollar amount set for the investment. He said the system's first priority would be to manage the fund for the maximum return for the benefit of beneficiaries.
"I certainly recognize the state's interest in Maryland's biotech industry and economic development," Kenderdine said. "If it's found that a very good risk-adjusted return can be realized through investments in biotechnology and 'green' technology, then I'm sure the board of trustees as well as our chief investment officer is going to want to make that investment."