more than 2% of the book value of the total assets of the
fund as determined for financial statement purposes as of
June 30 next preceding the date of investment.
(2) An investment shall be deemed a venture capital
investment if it results in the acquisition of equity
interests or a combination of debt and equity interests in a
business that is expected to grow substantially in the future
and in which the expected return on investment is to come
predominantly from an increase in value of the equity
interests and are not interests in or secured by real estate.
(3) A venture capital investment may be made only if, in
the judgment of the board, the investment is reasonably
likely to enhance the general welfare of the Commonwealth and
its residents and meets the standard of prudence set forth in
subsection (a).
(4) In determining whether the investment meets the
standard of prudence, the board may consider, together with
the expected return on and the risk characteristics of the
particular investment, the actual and expected future returns
and the risk characteristics of the total venture capital
investments held by the board at the time and the degree to
which the proposed new investment would promote further
diversification within the venture capital asset class.
* * *
Section 2. Section 5931(h) of Title 71 is amended to read:
§ 5931. Management of fund and accounts.
* * *
(h) Venture capital, private placement and alternative
investments.--[The board in its prudent discretion may make any
venture capital investment, private placement investment or
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