Public pension funds and economically targeted investments

As the assets of public employee retirement systems grow (to $1 trillion by 1994), so does the interest in targeting these assets to specific goals, primarily housing and job creation, in a system's geographic area. If properly structured, these investments, often called economically targeted investments, or ETIs, can be a legitimate part of a public retirement system's portfolio. This article clarifies several essential characteristics of ETIs. Previous studies, national surveys and actual ETI portfolios are examined. The article argues that further analysis, especially involving evaluation techniques, is essential as this investment strategy continues to gain steam, especially with the encouragement of the Clinton Administration.