If a bill in the New Jersey legislature becomes law, the state will be able to invest in local biotechnology firms, a coauthor of the bill said last week.
Senate Bill 712, which was passed Dec. 15 and is pending in the Assembly, has come under some scrutiny because it would allow the state's pension funds to invest in riskier products such as venture capital, junk bonds, and derivatives.
But the bill's coauthor, Sen. Robert Singer, R-Ocean and Burlington counties, said the measure offers a way for New Jersey to support local business.
"States such as California, Massachusetts, New York, Wisconsin, and Pennsylvania allow investment in high-technology funds," said Singer, who cowrote the legislation with Sen. James McGreevey, D-Middlesex County. "Many of these states own a percentage of biotechnology firms in New Jersey, but New Jersey right now could not buy a share in any biotechnology company."
Singer said he wanted to amend the bill because of his work as chairman of the Senate's task force on biotechnology. During meetings over the last two years, he heard biotechnology industry concerns that New Jersey was failing to invest in home-grown businesses.
As amended, the bill would allow for state investment in "diversified pools of venture capital." Such venture capital would include investment in New Jersey biotechnology firms, Singer said.
Roland Machold, director of the state's investment division, called the amended bill "a prudent investor law."
The bill calls for the use of "whole plan principles," meaning that the state's investment funds would be able to balance their high-risk and low-risk investments, Machold said.