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BWC announces $30.5 million investment in Third Frontier
Monday, July 26, 2004
The Ohio Bureau of Workers’ Compensation (BWC) announced today that it plans to fund seven venture
capital firms a total of $30.5 million. The decision was praised by Governor Bob Taft and others for
its commitment to the state’s economic development plan and for adhering to the principles of the
Third Frontier Project.
“These venture capital firms believe in Ohio businesses and are committed to helping create jobs in
developing industries that will allow this state’s economy to grow,” Governor Taft said. “This is a
solid investment in Ohio’s future.”
The seven venture capital firms were selected because they expressed an interest in finding and funding
new advanced technology companies in Ohio.
James Conrad, BWC Administrator and CEO, echoed the Governor’s comments.
“This decision clearly shows BWC is dedicated to finding opportunities for new employers to take root
here in Ohio,” Conrad said. “The investment strategies of these seven firms clearly mirror the
objectives of BWC’s investment policy, which are keeping employer costs low while ensuring injured
workers get high-quality treatment.
“Not only does this investment make sense in terms of BWC’s operations, but it becomes even more
attractive because this decision will fulfill our objectives and help Ohio become a
marquee place for advanced technology companies to grow and thrive.”
Andrew E. Doehrel, president/CEO of the Ohio Chamber of Commerce, said, “We applaud Governor Taft
and BWC for this innovative new investment program. It will help get valuable capital to high-tech,
start-up companies in a responsible way and ensure the future growth of Ohio’s economy.”
BWC put out a request for proposal in December 2003 seeking venture capitalists to fund start-up Ohio
companies that are involved in technology-based industries such as biomedical and fuel cell research,
polymers and advanced materials.
From those responses, BWC made a recommendation to approve seven firms to the Workers’ Compensation
Oversight Commission, who concurred with the bureau’s decision. Three of the private equity firms are
headquartered in Ohio.
Conrad believes these firms have the ability to successfully identify new and existing companies in
Ohio that have business plans which parallel the Third Frontier. The Third Frontier Project is
Governor Taft’s $1.1 billion plan to secure good jobs by building world class research facilities,
supporting early stage capital formation and promoting the research, development and commercialization
of next generation products.
“While we never would mandate a manager do business with only companies in one region or state,”
Conrad said, “we believe these seven firms will promote a proactive business climate in Ohio while
developing, retaining and expanding the talent pool of Ohio workers.”
BWC’s decision to invest in venture capital funds also drew praise from State Development Director
Bruce Johnson. “Access to venture capital is crucial to attracting the type of high-tech companies
that will provide the best jobs in our knowledge economy,” said Johnson. “In addition, their decision
to consider the state’s overall economic development efforts in their investment plan demonstrates the
type of interagency cooperation we are pursuing through Governor Taft’s Jobs Cabinet.” The Jobs
Cabinet, chaired by Johnson, is comprised of 14 state agencies working together to facilitate
interagency cooperation in order to enhance Ohio’s business environment and to secure good jobs for
Ohioans.
BWC employs an investment policy that focuses on long-term growth and minimizing risk while seeking
to outperform broad market indices and the impact of inflation. Of its $14 billion portfolio, only
3 percent is allocated toward private equity securities.
The purpose of investing in venture capital firms is to enhance the overall investment return of BWC’s
state insurance fund while reducing risk through increased diversification. Venture capital firms
seek to identify privately held companies with above-average, long-term growth potential.
Those funds receiving investment are:
- Seneca Partners, Birmingham, Mich.;
- Early Stage Partners, Cleveland, Ohio;
- Draper Triangle Ventures, Pittsburgh, Penn.;
- Charter Life Sciences, Cincinnati, Ohio;
- Triathlon Medical Ventures, Cincinnati, Ohio;
- Technology Venture Partners, Minneapolis, Minn.;
- EDF Ventures, Ann Arbor, Mich.
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MEDIA CONTACT: Jeremy Jackson, Ohio Bureau of Workers’ Compensation,
at (614) 752-7558, or
Emily Hicks at (614) 728-6197.
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