Newly appointed Chicago Treasurer Kurt Summers last month announced his plans to invest portions of the city’s pension money locally.
Last week, he met with some local business owners and residents and talked further about his ideas, which include making direct investments in Chicago’s predominately black neighborhoods.
Heard by Progress Illinois:
Summers told the crowd that his office manages a combined $50 billion in investments as well as employee pension funds and retirement plans. He said he would like to see some of that money invested in neighborhoods like Bronzeville.
“I don’t view a neighborhood investment strategy as a risky strategy,” said Summers, a product of Bronzeville. “I don’t view that as any more risky than investing in Korea’s debt, which we do, or investing in a cement company in Mexico. I don’t believe investing in Bronzeville is any riskier than that.”
In fact, investing in neighborhoods makes good business sense, he said. It would boost the local economy, create jobs and a stronger tax base from new businesses and the entrepreneurs those investments would generate, Summers pointed out.
To invest in neighborhoods, changes need to be made to the city’s investment policies. Currently, Summers said, there is no mandate to invest pension fund money back into the city, even though cities in other states like New York, California and Florida already do so.
“City Council gives me an investment policy and parameters that I can invest with,” he said. “I likely will be proposing a new one to allow me to do some of the other things I want to do like invest in this community, which it doesn’t have a mandate for today.”
The plan doesn’t come without controversy. As a pension trustee, Summers has a fiduciary duty to make the city’s pension funds as healthy as possible. That means maximizing investment returns – a concept that may or may not square with local economic development.